Which of the Following Statements Regarding Costs and Decision Making

question 68

Multiple Choice

Which of the following statements regarding costs and decision making is correct?

• A) Fixed costs must be considered only on a per-unit basis.
• B) Per-unit fixed cost amounts are valid only for make-or-buy decisions.
• C) Per-unit fixed costs can be misleading because such amounts appear to behave as variable costs when, in actuality, the amounts are related to fixed expenditures.
• D) Sunk costs can be misleading in make-or-buy decisions because these amounts appear to be relevant differential costs.
• E) Opportunity costs should be ignored when evaluating decision alternatives.

---

Definitions:

Personal Needs

The essentials required by an individual to maintain their physical and emotional wellbeing.

Polypharmacy

A situation in which elderly people are prescribed several medications. The various side effects and interactions of those medications can result in symptoms typical of major neurocognitive disorder.

Prescription Drugs

Medications legally prescribed by a doctor to treat a variety of health conditions, requiring a healthcare provider's authorization to purchase.

Elderly People

Individuals of an advanced age, often defined contextually but generally pertaining to those who have reached retirement age or older.