Question

Please, make sure these are correct!

1. Select the correct statement regarding relevant costs and revenues.

a.Relevant costs are also known as unavoidable costs.
b.Relevant costs are only those that are based on past experience.
c.Relevant revenues must differ between the alternatives.
d.All of these.

2.Which of the following is not a possible alternate term for costs that can be eliminated by taking a specified course of action?

a.Avoidable costs
b.Opportunity costs
c.Relevant costs
d.Differential costs

3. For purposes of decision making, avoidable costs are costs that:

a. were incurred in the past.
b. will not be incurred in the future, regardless of the alternative chosen.
c. differ between alternatives.
d. None of these.

Answer 1

1. C

2. B

3. C

Step-by-step explanation:

1. Relevant costs are cost that influence management decision making. Relevant revenues must differ between alternatives

2. Opportunity cost is defined as the next best alternative. Between 2 options one is forgone and the other is taken up due to it being more valuable.

3. Avoidable costs are cost that can be avoided and they differ between alternatives.