Relevant Cost on Decision Making
Save
Edit
Start a multiplayer game
Play LiveLive
Assign HW
Solo Practice
Practice
Preview (10 questions)Show answers
  • Question 1
    30 seconds
    Report an issue
    Q.

    An accounting information system should be designed to provide useful information. To be useful the information must be:

    answer choices

    qualitative not quantitative

    unique and unavailable through other sources

    historical in nature and not purport to predict the future

    relevant, accurate and timely

  • Question 2
    30 seconds
    Report an issue
    Q.

    If a management accountant is trying to decide whether a cost is relevant to a decision, he or she should consider the cost relevant if:

    answer choices

    it is a historical cost precise in nature.

    it is an expected future cost that is different for each alternative

    it is a historical cost that is the same among all alternatives.

    it is an expected future cost that is the same for each alternative

  • Question 3
    30 seconds
    Report an issue
    Q.

    In order for information to be relevant, the decision to be made must have an effect on:

    answer choices

    future cost or revenues

    past cost or revenues

    the timeliness of information

  • Question 4
    30 seconds
    Report an issue
    Q.

    An opportunity cost is defined as:

    answer choices

    the profit of the next best alternative foregone

    the additional (incremental) cost of accepting the order

    the additional revenue if we do not drop the product.

  • Question 5
    30 seconds
    Report an issue
    Q.

    Which of the following would be a relevant cost that would need to be considered for pricing a special order?

    answer choices

    Existing fixed manufacturing overhead

    Additional set-up costs for the special order

    . Non-manufacturing costs that will not change even if the special order is accepted

  • Question 6
    30 seconds
    Report an issue
    Q.

    Sunk costs, unitising costs, how costs are allocated, and leaving out opportunity costs are all factors where errors are often made, and will ultimately affect the outcome of the decision.

    answer choices

    TRUE

    FALSE

  • Question 7
    30 seconds
    Report an issue
    Q.

    Efficient decision-making tends to consider relevant information only and this information focuses on incremental revenue and expenses.

    answer choices

    TRUE

    FALSE

  • Question 8
    30 seconds
    Report an issue
    Q.

    The book value of an asset such as equipment is an example of:

    answer choices

    a future cost

    a sunk cost.

    an opportunity cost.

  • Question 9
    30 seconds
    Report an issue
    Q.

    Which of the following statements about relevant information is/are true?

    i. For information to be relevant, it must relate to the future.

    ii. For information to be relevant, it must differ between the alternatives.

    iii. For information to be relevant, it must be completely accurate

    answer choices

    i and ii

    i and iii

    All of the given answers

  • Question 10
    30 seconds
    Report an issue
    Q.

    When a department or a product is showing a loss after all costs have been traced and allocated, a company has no option but to make the decision to either close the department or drop the product.

    answer choices

    TRUE

    FALSE

Report an issue
Why show ads?
Report Ad
Join a game