Which of the Following Is Not True Regarding the Determination

question 128

Multiple Choice

Which of the following is not true regarding the determination of relevant costs and relevant revenues associated with quality-related initiatives (such as the move to JIT production) ?

• A) Relevant costs are defined as future costs that differ between and among decision alternatives.
• B) Relevant costs exclude opportunity costs since these costs are not normally recorded by accounting systems.
• C) Relevant costs include all "avoidable" costs.
• D) Long-term effects of relevant costs and relevant revenues are usually assessed using discounted cash flow (DCF) capital budgeting decision models.
• E) Relevant revenues could include the contribution margin associated with increased sales (because of decreased cycle times associated with JIT).

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Definitions:

American Law Institute (ALI) Rule

A standard for determining legal insanity, emphasizing the inability to understand the wrongfulness of an act or to act in a lawful manner.

M'Naghten Rule

A legal principle stating that a person cannot be held responsible for a crime if they were unaware of what they were doing or did not know it was wrong due to a mental disorder.

Durham Rule

A legal standard used to determine criminal liability, stating a defendant is not responsible if an unlawful act is the product of mental disease or defect.

Antisocial Conduct

Behavior that is hostile, aggressive, or damaging to societal relationships and rules.