Chapter 11 part 1 Flashcards
Costs and benefits that should be ignored when making decisions are called ______ costs and benefits.
incremental
opportunity
irrelevant
relevant
differential
irrelevant
A future cost that is not the same between any two alternatives is known as a(n) _________
, incremental, or avoidable cost
differential
Costs that have already been incurred and cannot be avoided regardless of what a manager decides to do are ______ costs.
sunk
differential
avoidable
relevant
sunk
Irrelevant costs include ______.
sunk costs
all fixed costs
future costs that do not differ between alternatives
future costs that differ between alternatives
sunk costs
future costs that do not differ between alternatives
The first step in decision making is to______.
identify relevant costs and benefits
perform a differential analysis
define the alternatives
define the alternatives
Costs and benefits that always differ between alternatives are ______ costs and benefits.
relevant
sunk
irrelevant
variable
relevant
Synonyms for differential costs include ______ cost.
sunk
incremental
avoidable
irrelevant
incremental
avoidable
When planning a road trip, the ______ is a sunk cost and should be ignored.
Multiple choice question.
cost of parking at the motel where one will be staying
original cost of the car
cost of car repairs and maintenance
cost of gasoline for the trip
original cost of the car
Costs that have no impact on future cash flows and are irrelevant to decisions are ______ costs.
avoidable
sunk
unavoidable
marginal
sunk
