Chapter 11

Question 1

Relevant costs

Answer 1

Future costs that will change as a result of a decision

Question 2

Relevant revenues

Answer 2

Future revenues that will change as a result of a decision

Question 3

Incremental costs

Answer 3

Cost increases resulting from the performance of an additional activity

Question 4

Avoidable costs

Answer 4

Costs that must be incurred to perform an activity at a given level, but that can be avoided if that activity is reduced or discontinued

Question 5

Opportunity costs

Answer 5

Profits that a business forgoes by following a particular course of action