Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 10, Problem 2EB
You are trying to decide whether to take a job after you graduate or go onto graduate school.
Consider the following questions as you make your decision.
A. Which of these costs, for the most part, would be relevant (R), and which would be irrelevant (IR)?
- Cost of your Undergraduate education
- Salary with an undergraduate degree
- Salary with both an undergraduate degree and a graduate degree
- Rent
- Car Insurance
- Graduate school tuition and fees
- Food costs
- Moving expenses
B. Which of these costs could have a differential amount that is relevant/irrelevant, depending upon the location and or policies of your new job?
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Frank Pepe’s Restaurant and Pie Shop needs help defining the costs for his business. Frank also wants to know which costs are relevant or irrelevant to his decision making.
Identify each cost as relevant or irrelevant.
Then identify the type of cost (sunk, fixed, variable, or opportunity).
Cost
Relevant or irrelevant
sunk, fixed, variable, or opportunity
Rent
baker wages
franks culinary school tuition
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franks decision not to attend graduate school
Chapter 10 Solutions
Principles of Accounting Volume 2
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