“It is not important for a company to distinguish between cost incurrence and locked-in costs.” Do you agree? Explain.
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“It is not important for a company to distinguish between cost incurrence and locked-in costs.” Do you agree? Explain.
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- 1-Why is it important to distinguish cost incurrence from locked-in cost? 2- How do companies determine target costs?What is the danger in allocating common fixed costs among product lines or other segmentsof an organization?“Sunk costs are considered by a manufacturer in decision making”. Do you agree? Explain.
- Demonstrate why expressing fixed costs on a per unit of activity basis is misleading and may result in faulty decisions.Explain whether the following statements are valid or not valid:A. Target costing ignores non-value added activitiesB. Target costing is not applicable to a monopoly marketi.“Differential Costs” are considered as relevant, where as “sunk Cost ” is considered asirrelevant for decision making purposes. Explain ii. Why opportunity cost is measured and relate with the evaluation of alternative, can it bean opportunity loss? iii. Which one either spoiled goods or defective goods are less economical for the companyand why?
- In a drop or continue decision, only the variable costs identified with a product are relevant in a decision-making. true or false?Do you agree from the following statements- Explain in details with examples 1.Variable costs are controllable but fixed costs are not. 1.Sunk costs are irrelevant cost while making any decision.Which of the following costs are irrelevant to business decisions? a. Avoidable costs b. Costs that differ between alternatives c. Sunk costs d. Variable costs
- Which of these costs is considered as the most important cost because if it is not met, an enterprise may fail to materialize.a. All of theseb. Increment costc. Fixed costd. First costConsider the following statements concerning costs. 1. A committed cost cannot vary with the decision. 2. An outlay cost cannot vary with the decision. Are the above statements true or false?In a make versus buy decision which of thefollowing factors is not relevant? fixed production costsreliability of supplierreliability of bought-in productsopportunity cost of alternative activities