A Cost Is Not Relevant for Decision Making If It

question 103

Multiple Choice

A cost is not relevant for decision making if it:

• A) Does not differ for each option available to the decision maker.
• B) Changes from period to period.
• C) Is a future cost.
• D) Is a mixed cost.
• E) Is a fixed cost.

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Definitions:

Efficiency Of Investment

The degree to which invested resources are used optimally to achieve desired outcomes without waste.

Beneficiary

An individual or entity entitled to receive benefits or profits from a will, trust, insurance policy, or other arrangements designed to distribute assets.

Economic Profit

The profit a company makes after deducting both its explicit (direct) and implicit (indirect) costs.

Allocation Of Resources

The process by which resources are distributed for the production of goods and services, usually determined by market forces in a free market, or by government decisions in a planned economy.