Label every of the adhering to statements as either true (“T”) orfalse (“F”).

You are watching: An additional cost incurred only if a company pursues a particular course of action is a(n):

a) an opportunity expense is the potential benefit that is shed bytaking a particular action when two or an ext alternative options areavailable.

b) A sunk price will readjust with a future food of action.

c) an out-of-pocket price requires a existing and/or future outlayof cash.

d) Relevant prices are also known as unpreventable costs.

e) Incremental expenses are also known as differential costs.


1. I m sorry of the following prices is not appropriate in aspecial-order decision?A. Straight laborB. Straight materialsC. Variable overheadD. Resolved overhead

2. Expenses that change across decision alternatives areA. Accountancy costs.B. Activity-based costs.C. Incremental costs.D. Capital costs.

4. The potential advantage of one different that is lost bychoosing one more is known as a(n):A. Sunk costB. Out-of-pocket costC. Differential costD. Opportunity cost

5. A cost that can not be avoided or adjusted because that arisesfrom a previous decision, and is irregularity to future decisions, iscalled a(n):A. Uncontrollable costB. Incremental costC. Opportunity costD. Sunk cost

6. An additional cost the is incurred just if a particularaction is bring away is a(n):A. Period costB. Bag costC. Discount costD. Incremental cost

7. The payback period:a. Is the length of time important to recoup the entire cost of aninvestment indigenous its resulting annual net cash flow.b. Is the length of time important to recover the entire price of aninvestment from its resulting annual net income.c. Take away into consideration the benefit of an investment overits whole life, yet ignores the timing of that future cashflows.d. Bring away into consideration both the profitability of an investmentover its entire life and the time of the future cash flows.


Which the the complying with is a period cost?

a. Incomes of one assembly worker

b. Depreciation on manufacturing facility equipment

c. Sales commissions

d. Power

A cost that has been incurred in the past and is irregularity istermed a(n):

a. Change cost.

b. Opportunity cost.

c. Sunk cost.

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d. Differential cost.

Compute manufacturing facility overhead cost from the complying with costs:

Depreciation on factory buildings $ 45,950
Depreciation ~ above office equipment 32,980
Direct materials used 96,840
Indirect labor 6,580

a. $96,840