Select the Correct Statement Regarding Relevant Costs and Revenues

question 60

Multiple Choice

Select the correct statement regarding relevant costs and revenues.

• A) Sunk costs are relevant for decision-making purposes.
• B) Relevant costs are frequently called unavoidable costs.
• C) Direct labor is an example of a unit-level cost.
• D) Only variable costs are relevant for decision making.

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Definitions:

Direct Labor

The wages or salaries paid to employees who are directly involved in producing goods or providing services.

Electric Power

Electric power is the rate at which electrical energy is transferred by an electric circuit, commonly utilized for domestic, commercial, and industrial activities.

Fixed Costs

Expenses that do not change with the level of goods or services produced over the short term, such as rent or salaries.

Continuous Budgeting

A process of continuously updating the budget by adding a new period as the current period is completed, ensuring the budget always extends a fixed period into the future.