Indicate Whether Each of the Following Statements Is True or False

question 31

Short Answer

Indicate whether each of the following statements is true or false.
1. To be relevant in decision making, information must be based on past experience.
2. All quantitative information that differs among the decision alternatives under consideration is relevant.
3. Costs that cannot be changed are not relevant to a decision.
4. Sunk costs may appropriately be considered in decision making if they are significant in amount.
5. Differential revenues are relevant in decision making.

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing process of a specific product and integral to its production.

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to consumers.

Work in Process Inventory

Goods that are in the process of being manufactured but are not yet completed.

Direct Materials

Raw materials that are directly traceable and attributable to the manufacturing process of a product.