Identify the Truthfulness of the Following Statements

question 32

Multiple Choice

Identify the truthfulness of the following statements.
I. A firm decides to purchase a computer for $1,500 at the end of the month. The computer will be used for administrative purposes that do not vary with the volume of product that the firm makes. The computer has no re-sale value. This is a fixed cost. At the beginning of the month, this cost is non-sunk.
II. A firm decides to purchase a computer for $1,500 at the beginning of the month. The computer will be used for administrative purposes that do not vary with the volume of product that the firm makes. The computer has no re-sale value. This is a fixed cost. At the end of the month, this cost is sunk.

• A) Both I and II are true.
• B) Both I and II are false.
• C) I is true; II is false.
• D) I is false; II is true.

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Definitions:

Total Minutes

The complete count of minutes accumulated across a specified timeframe, often used in time tracking or productivity analysis.

Time-Driven

Refers to activities or processes that are scheduled or organized based on time, often used in activity-based costing systems.

Activity-Based Costing

A system of costing that divides overhead and indirect costs among products and services based on the activities they perform.

Matching Capacity

The process of adjusting the production capability of a company to meet the actual demand for its products or services.