Unavoidable Fixed Costs Are

question 123

Multiple Choice

Unavoidable fixed costs are

• A)irrelevant to the decision of whether to discontinue a product line because they will differ between alternatives.
• B)relevant to the decision of whether to discontinue the department.
• C)irrelevant to the decision of whether to discontinue a product line because they will not differ between alternatives.
• D)none of the above.

Acknowledge the financial responsibilities and functions that fall under the chief financial officer (CFO).

Understand the classification of manufacturing costs into direct materials, direct labor, and factory overhead.

Distinguish between the concepts of prime costs and conversion costs.

Recognize the definitions of product costs and period costs, and their implications on financial statements.

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Definitions:

Fair Value

The assessed financial value of an asset or liability, reflecting current market prices in an open and competitive environment.

Significant Influence

Significant Influence is the power to participate in the financial and operating policy decisions of an investee, but not control them, typically associated with ownership of 20% to 50% of voting shares.

Database

A structured set of data held in a computer or server, accessible in various ways for efficient retrieval and management.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control them. This is often evidenced by owning a substantial minority of voting stock.