Which of the Following Is Irrelevant When Making a Decision

question 160

Multiple Choice

Which of the following is irrelevant when making a decision?

• A)Fixed overhead costs that differ among alternatives
• B)The cost of an asset that the company is considering replacing
• C)The cost of further processing a product that could be sold as is
• D)The expected increase in contribution margin of one product line as a result of a decision to discontinue a separate unprofitable product line

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Definitions:

Discretionary Product

A product that consumers purchase based on personal preference and available income, as opposed to essential goods.

Convenience Product

Goods or services that consumers purchase frequently, immediately, and with minimal effort, such as bread, milk, or gas.

Specialty Product

Goods or services with unique characteristics that buyers are often willing to expend considerable effort to purchase.

Unsought Product

Products that consumers do not normally think of buying or do not know exist until they are needed or encountered.