Irrelevant Costs Are Those That Will Not Impact the Decision

question 22

True/False

Irrelevant costs are those that will not impact the decision maker's options and thus can be eliminated from analyses.

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Definitions:

Raw Materials

Basic materials that are used in the production process to manufacture products, before any processing or manufacturing has occurred.

Finished Goods

Items that are finished being made but have not been purchased by consumers yet.

Job-Order Costing

An accounting method that assigns costs to specific production batches or jobs, suitable for firms producing distinct products or jobs.

Overapplied Overhead

A scenario in which the overhead costs assigned are greater than the overhead costs that were actually incurred.