361 Chaptr 10 MC Solutions.docxVIP

Chapter 10  PAGE 28 Chapter 10—Relevant Information for Decision Making MULTIPLE CHOICE 1. Costs forgone when an individual or organization chooses one option over another are a.budgeted costs.b.sunk costs.c.historical costs.d.opportunity costs. ANS: D PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling 2. Which of the following costs would not be accounted for in a companys recordkeeping system? a.an unexpired costb.an expired costc.a product costd.an opportunity cost ANS: D PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling 3. Which of the following is not a characteristic of relevant costing information? It is a.associated with the decision under consideration.b.significant to the decision maker.c.readily quantifiable.d.related to a future endeavor. ANS: C PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling  4. A fixed cost is relevant if it is a.uncontrollable.b.avoidable.c.sunk.d.a product cost. ANS: B PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling 5. Relevant costs are a.all fixed and variable costs.b.all costs that would be incurred within the relevant range of production.c.past costs that are expected to be different in the future.d.anticipated future costs that will differ among various alternatives. ANS: D PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling 6. Which of the following is the least likely to be a relevant item in deciding whether to replace an old machine? a.acquisition cost of the old machineb.outlay to be made for the new machinec.annual savings to be enjoyed on the new machined.life of the new machine ANS: A PTS: 1 DIF: Easy OBJ: 10-2 NAT: AACSB: Re