Which of the Following Statements Is True

question 111

Multiple Choice

Which of the following statements is true?

• A) Past costs are always relevant for decisions and are often useful in estimating future cost behaviour
• B) Past costs are always relevant for decisions, but are rarely useful in estimating future cost behaviour
• C) Past costs are never relevant for decisions, but are often useful in estimating future cost behaviour
• D) Past costs are never relevant for decisions, nor are they useful in estimating future cost behaviour

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Definitions:

Total Costs

The complete amount of expenses incurred by a business to produce, market, and sell a product or service, including fixed and variable costs.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance premiums.

Sales Commissions

Financial compensation awarded to sales personnel for meeting or exceeding sales targets, often a percentage of the sales they generate.

Materials

The physical substances or components needed to create a product or to carry out a service or process.