What is meant by relevant costs and there use in making short-term decisions?

Q: Explain Fixed and Variable Costs?

A: Fixed Cost is the cost which remains same irrespective of the capital or strategic decision made by…

Q: Sunk costs should always be included when considering the cost of an activity. True or false, and…

A: Sunk cost are those cost which are already incurred by the business , But business cannot recovered…

Q: analysis? What are identified as possible risks associated with cost

A: Definition: A technique for calculating the costs related to a business prospect or proposal, as…

Q: the amount of relevant costs that would be saved

A: Relevant costs mean the variable costs that affect the decision making.

Q: Does the concept of the relevant range apply to fixed costs? Explain.

A: Fixed Cost: It is a cost which is constant in the short run, it is not related to any change in the…

Q: Costs that will differ between alternatives and influence the outcome of a decision are

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: What is the relevant range? What role does the relevant range concept play in explaining how costs…

A: Relevant range refers to the level of the activity which represents the maximum and minimum limits…

Q: Is there a difference between relevant costs and incremental costs? Explain

A: Relevant cost: Relevant cost is the cost which is relevant in decision making of a project, and…

Q: Explain any one pros and cons of historical cost.

A: Historical cost is one of the four basic accounting principles. This method is used under Generally…

Q: Explain the usefulness of contribution margin and responsibility margin in making short-term…

A: Decision-making process: Decision making can be defined as the process of making choices through…

Q: What are the consequences of broad averaging on costs? Explain?

A: Broad Averaging:Broad averaging is also known as peanut butter cost is a costing approach of…

Q: “Sunk costs are easy to spot—they’re simply the fixed costs associated with a decision.” Do…

A: Sunk cost: Sunk cost is the cost that has been incurred as a result of past events and such cost…

Q: What is the relevant range? How does fixed costs and variable costs behave outside the relevant…

A: Relevant range refers to the level of the activity which represents the maximum and minimum limits…

Q: What is interpretation of the usefulness of the contribution margin concept?

A: Contribution margin The additional profit gained for each unit sold is calculated by subtracting the…

Q: How does an engineered cost differ from a discretionary cost?

A:

Q: Why opportunity cost is measured and relate with the evaluation of alternative, can it be an…

A: Cost or expenditure is the total amount spent by an individual, group and company to make a finished…

Q: How is life-cycle-cost analysis useful?

A: Life Cycle Costing (LCC) is a process of accounting which is used by the owner or management of an…

Q: What does it mean to externalize costs?

A: Externalizing costs means generating profits by reducing the indirect costs by imposing them on…

Q: The costs most relevant to be used in decision making are: a. sunk costs O b. current costs O c.…

A: Cost: It implies to the expense that is incurred on the manufacturing of a product or rendering…

Q: Why base measurement on historical costs?

A: Historical cost:   Historical cost explains that assets and liabilities appear in the financial…

Q: What is value-chain analysis? What role does it play in strategic cost analysis?

A:

Q: Why is an incremental analysis necessary when conducting a rate of return analysis for cost…

A: Incremental analysis considers only the relevant cash flows and it does not consider the…

Q: How does the length of the time horizon affect the classification of a cost as fixed or variable?…

A: Cost are being classified as variable and fixed normally. It is necessary to bifurcate the cost in…

Q: be considered

A: The phrase "mixed costs" in accounting refers to costs and expenses that include two components:…

Q: What are “initial direct costs” and how are they accountedfor?

A:

Q: Which of the following costs can be ignored when making a decision? a. Opportunity costs. b.…

A: Sunk cost can be ignored when making a decision. It is irrelevant cost for decision making.  Sunk…

Q: Critically evaluate the concept and application of marginal costing

A: Marginal Costing :— Marginal Costing is the Part of Cost management Techniques.  Marginal Costing…

Q: How do you calculate Benefit Cost Ratio (BCR). Mention the decision making process of BCR

A: The present value of the benefit is divided by the cost and investment in order to calculate the…

Q: Discuss the relationship between fixed costs, variable costs and risk.

A: 1. Fixed cost Fixed assets are assets that are used in an organization for the purpose of long-term…

Q: Define relevant costs. Why are historical costs irrelevant?

A: Relevant cost: A cost that is specific in the managerial decision making are called relevant cost.…

Q: Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on…

A: Cost accounting is one of the branch of accounting. Under this, various type of costs are being…

Q: why is it important to keep current cost in lined with planned cost?

A: Current cost means the cost which we are incurring right now. Planned cost means the standard cost…

Q: What are “initial direct costs” and how are they accounted for by lessees and lessors?

A: Initial Direct Costs: Initial direct costs refer to the costs that a lessor incurs directly while a…

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.