Q1) Which of the following costs would be relevant in short-term decision making?
a. incremental fixed costs
b. All costs or inventory
c. Total variable costs that are the same in the considered alternatives
d. costs of fixed assets to be used in the alternatives
e. opportunity costs that are the same in the considered alternatives.
Q2) What are the assumptions that underlie the classical model of decision-making and explain how this model would help to explain the behavior of a manager who was attempting to act consistently with this model in a realistic business situation of your choosing?