Which of the following depicts the correct order of the steps in management's decision-making process?
determine and evaluate course of action, make a decision, evaluate the results.
Opportunity cost is
always a relevant cost
The focus of a sell or process further decision is
Incremental revenues & Incremental costs
An opportunity cost is
Is the potential benefit that may be obtained by following an alternative course of action.
If qualitative decisions involving incremental analysis are not easily measured they can safely be ignored.
false
sunk costs are analyzed during incremental analysis
false (differential revenues are)
What will most likely occur if a company eliminates an unprofitable segment when a portion of fixed costs are unavoidable?
Net income will decrease
Arlington Co. has excess capacity. Under what situations should the company accept a special order for less than the current selling price
when incremental revenues exceed incremental costs
Costs that will differ between alternatives and influence the outcome of a decision are
relevant costs
opportunity cost is usually a ____ cost
potential
From a quantitative standpoint, a segment should be eliminated if its contribution margin is greater than the fixed costs that can be eliminated.
false
A company decided to replace an old machine with a new machine. Which of the following is considered a relevant cost?
the current disposal price of the old equipment