1._____________ is a cost management technique in which the firm determines the required cost for a product or service in order to earn a desired profit when the marketplace establishes the product's selling price.
A. Relevant costing
B. Product costing
C. Differential costing
D. Target costing
2.______________ can be measured as the income that could have been earned on an asset, based on the potential rate of return that is lost or sacrificed when one alternative use of the asset is chosen over another.
A. Target cost
B. Sunk cost
C. Opportunity cost
D. Allocated cost
3._____________ costs between two alternative projects are those that would result from selecting one alternative instead of the other.
A. Allocated
B. Differential
C. Sunk
D. Irrelevant
4.Which of the following cost classifications would not be considered relevant in comparing decision alternatives?
A. Opportunity cost.
B. Differential cost.
C. Sunk cost.
D. None of the above.
5.In considering whether to accept a special order at a price less than the normal selling price of the product and where the additional sales will make use of present idle capacity, which of the following costs will not be relevant?
A. Direct labor.
B. Direct materials.
C. Variable manufacturing overhead.
D. Fixed manufacturing overhead that cannot be avoided.
6.A cost classified "for decision making purposes" would include:
A. period cost.
B. opportunity cost.
C. controllable cost.
D. inventoriable cost.
7.Relevant costs in decision-making:
A. are future costs that represent differences between decision alternatives.
B. result from past decisions.
C. should not influence the decision.
D. none of the above.
8.A cost is considered relevant if:
A. it is positive.
B. it is sunk.
C. it makes a difference.
D. it can't be changed.
9.If a cost is irrelevant to a decision, the cost could not be a:
A. fixed cost.
B. sunk cost.
C. differential cost.
D. variable cost.
10.The potential rental value of space used in the manufacturing process:
A. is a variable production cost.
B. is an unavoidable production cost.
C. is a sunk production cost.
D. is an opportunity cost if production is not outsourced.