Managerial Accounting - Exercises

1) Differential cost is the difference in cost between two alternatives. T or F

2) Decision making is guided only by differential costs.T or F

3) Irrelevant factors should be considered when making decisions.T or F

4) You are trying to decide whether or not to sell back your accounting textbook at the end of the class. The cost you paid for the book is relevant to your decision.T or F

5) Sunk costs are a major part of the decision making process.T or F

6) Costs resulting from product design are locked in.T or F

7) ________ information is that which differs between alternatives and can affect the future.

A) Historical

B) Irrelevant

C) Predictable

D) Relevant