Multiple Choke (2 points each): Please select/circle the correct answer. A cost

ID: 2485256 • Letter: M

Question

Multiple Choke (2 points each): Please select/circle the correct answer. A cost is not relevant for decision making if it: Does not differ for each option availabla to the decision maker Changes from period to period. Is a future cost. Is a mixed cost. Is a fixed cost. Fixed costs will often be irrelevant for short-term decision making because they: Do not vary on a per-unit-of-output basis. Are the same each time period. Typically do not differ between decision alternatives being considered. Are not committed. Cannot be estimated with precision. 'Special sales orders," as this term is used in Chapter 11 Generally arise from special marketing campaigns on the part of the setter. Typically come directly from the customer rather than through normal sales or distribution channels. Commonly represent a large part of a firm's overall business. Are usually not profitable to a firm in the short run. Do not involve long-term (that is. "normal") pricing considerations.

Explanation / Answer

A cost is not relevant for decision making

Option A) does not differ for each option available to the decision maker

If it does not change it is irrelevant, fixed costs are also generally irrelevant but it is relevant in cases where it is avoidable to some extent.

Fixed cost

C) typically do not differ between and among decision alternatives

Since we need to consider the alternative hence fixed cost is generally considered between the alternatives

Sales order

B) typically comes directly from the customer rather than normal sales or distribution channels

As the name suggests it is generally one time order