When Making a Decision, Which of the Following Should Not

question 37

Multiple Choice

When making a decision, which of the following should not be considered?

• A) Relevant costs
• B) Opportunity costs
• C) Sunk costs
• D) Risk

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Definitions:

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been sold.

Direct Labor

The wages and other compensation paid to workers who are directly involved in the production of goods or services.

Cash Collections

The process and sum of money received from business activities, such as sales or debt repayments, during a specific period.

Direct Labor Budget

A financial plan that estimates the cost of direct labor required to meet the production needs of a company over a specific period.