Which of the Following Is an Example of the Systematic

question 38

Multiple Choice

Which of the following is an example of the systematic bias of paying attention to sunk costs?

• A) About 80% of the people on an Internet dating site rate their looks as very good or above average.
• B) A person decides to save his overtime payment this week, but once he receives the payment, he spends it.
• C) A person buys a product because it is listed at 80% off an inflated price.
• D) People continue to play golf in a rainstorm because they don't want to waste the money they paid on greens fees.

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Definitions:

Weighted-Average Method

An accounting technique used to calculate the cost of goods sold and ending inventory cost by averaging the costs of all goods available for sale.

Cost per Equivalent Unit

A calculation used in process costing that determines the cost to complete one unit of production, considering both completed and partially completed units.

Conversion Costs

The combined costs of direct labor and manufacturing overhead, which are required to convert raw materials into finished goods.

Job-Order Costing

An accounting method that assigns costs to specific jobs or batches, often used for custom orders.