SURVEY OF ACCOUNTING-ACCESS
4th Edition
ISBN: 9780077631536
Author: Thomas Edmonds
Publisher: McGraw-Hill Education
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Chapter 12, Problem 6Q
To determine
An example to prove the statement that “Each direct costs are avoidable” is incorrect.
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Cost allocation is arbitrary, so there is nothing gained by it. We should report only the costs that we know are direct.” Do you agree? Why? Please be specific in supporting your position.
Which of the following statements is false? (You may select more than one answer.)a. Under some circumstances, a sunk cost may be a relevant cost.b. Future costs that do not differ between alternatives are irrelevant.c. The same cost may be relevant or irrelevant depending on the decision context.d. Only variable costs are relevant costs. Fixed costs cannot be relevant costs.
2. Give an example of cost which is a part of unavoidable cost.
Chapter 12 Solutions
SURVEY OF ACCOUNTING-ACCESS
Ch. 12 - 1.What is a cost object? Identify four different...Ch. 12 - Prob. 2QCh. 12 - 3.If the cost object is a manufactured product,...Ch. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - 10.Why are some manufacturing costs not directly...
Ch. 12 - Prob. 11QCh. 12 - 12.On January 31, the managers of Integra, Inc....Ch. 12 - 13.Respond to the following statement: The...Ch. 12 - Prob. 14QCh. 12 - Define the term cost pool. How are cost pools...Ch. 12 - Tapper Construction Company is composed of two...Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Lubbock Air is a large airline company that pays a...Ch. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14PCh. 12 - Prob. 15PCh. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Prob. 1ATCCh. 12 - Prob. 2ATCCh. 12 - Prob. 4ATCCh. 12 - Prob. 5ATC
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- ______ are the costs associated with not choosing the other alternative. A. Sunk costs B. Opportunity costs C. Differential costs D. Avoidable costsarrow_forward"ABC systems may result in misallocation of indirect costs."Do you agree? Give reasons for your answerarrow_forwardWhich type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making? Group of answer choices A. avoidable costs B. unavoidable costs C. sunk costs D. differential costsarrow_forward
- In a decision analysis situation, which one of the following costs is generally not relevant to the decision?A. Differential cost.B. Avoidable cost.C. Incremental cost.D. Historical cost.arrow_forwardConsider the following statements concerning costs. 1. A committed cost cannot vary with the decision. 2. An outlay cost cannot vary with the decision. Are the above statements true or false?arrow_forwardWhich of the following costs can be ignored when making a decision?a. Opportunity costs. b. Differential costs. c. Sunk costs. d. Relevant costs.arrow_forward
- Give two examples of sunk costs, and explain why they are irrelevant in decision making.arrow_forward_______________ are the costs associated with not choosing the other alternative Sunk costs Opportunity costs Differential costs Avoidable costsarrow_forwardA cost that cannot be changed because it arises from a past decision and is irrelevant to future decisions is a. An uncontrollable cost. d. An opportunity cost. b. An out-of-pocket cost. e. An incremental cost. c. A sunk cost.arrow_forward
- The following statements are incorrect, excepta. Cost is the same with expense.b. All costs require at least an outlay of resources.c. Different cost concepts and classifications are used for different purposed. none of the abovee. answer not givenarrow_forwardDemonstrate why expressing fixed costs on a per unit of activity basis is misleading and may result in faulty decisions.arrow_forwardWhat is the definition of cost? Please explain it clearly and don't plagiarized, thank youarrow_forward
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Relevant Costing Explained; Author: Kaplan UK;https://www.youtube.com/watch?v=hnsh3hlJAkI;License: Standard Youtube License