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Which of the following statements is false- a- Under some circumstance.docx

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Which of the following statements is false- a- Under some circumstance.docx

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Which of the following statements is false?
a. Under some circumstances, a sunk cost may be a relevant cost
b. Future costs that do not differ between alternatives are irrelevant
c. The same cost may be relevant or irrelevant depending on the decision context
d. Variable costs are relevant costs, and fixed costs can be relevant cost
Solution
Ans
a. Under some circumstances, a sunk cost may be a relevant cost -False-A Sunk cost by definition itself is sunk (past cost which does not have any relevance in the future decion making.) It is always sunk under all circumstances. It is defined as the cost which is incurred and lost the relevance in decision making.
Ex Cost of an equipment with no salvage value like one with can be used only wth the entities operation is a sunk cost.
Explaination for Other Options
b) Future costs that do not differ between alternatives are irrelevant- True.-Since any future cost that do not differ in cost or timing with respect to different alternatives is irrelevant.
c)The same cost may be relevant or irrelevant depending on the decision context- True-Context of the decision determines the relevance of the cost.
d)Variable costs are relevant costs, and fixed costs can be relevant cost-True-Discretionary fixed cost are generally relevant.
.

Which of the following statements is false?
a. Under some circumstances, a sunk cost may be a relevant cost
b. Future costs that do not differ between alternatives are irrelevant
c. The same cost may be relevant or irrelevant depending on the decision context
d. Variable costs are relevant costs, and fixed costs can be relevant cost
Solution
Ans
a. Under some circumstances, a sunk cost may be a relevant cost -False-A Sunk cost by definition itself is sunk (past cost which does not have any relevance in the future decion making.) It is always sunk under all circumstances. It is defined as the cost which is incurred and lost the relevance in decision making.
Ex Cost of an equipment with no salvage value like one with can be used only wth the entities operation is a sunk cost.
Explaination for Other Options
b) Future costs that do not differ between alternatives are irrelevant- True.-Since any future cost that do not differ in cost or timing with respect to different alternatives is irrelevant.
c)The same cost may be relevant or irrelevant depending on the decision context- True-Context of the decision determines the relevance of the cost.
d)Variable costs are relevant costs, and fixed costs can be relevant cost-True-Discretionary fixed cost are generally relevant.
.

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Which of the following statements is false- a- Under some circumstance.docx

  1. 1. Which of the following statements is false? a. Under some circumstances, a sunk cost may be a relevant cost b. Future costs that do not differ between alternatives are irrelevant c. The same cost may be relevant or irrelevant depending on the decision context d. Variable costs are relevant costs, and fixed costs can be relevant cost Solution Ans a. Under some circumstances, a sunk cost may be a relevant cost -False-A Sunk cost by definition itself is sunk (past cost which does not have any relevance in the future decion making.) It is always sunk under all circumstances. It is defined as the cost which is incurred and lost the relevance in decision making. Ex Cost of an equipment with no salvage value like one with can be used only wth the entities operation is a sunk cost. Explaination for Other Options b) Future costs that do not differ between alternatives are irrelevant- True.-Since any future cost that do not differ in cost or timing with respect to different alternatives is irrelevant. c)The same cost may be relevant or irrelevant depending on the decision context- True-Context of the decision determines the relevance of the cost. d)Variable costs are relevant costs, and fixed costs can be relevant cost-True-Discretionary fixed cost are generally relevant.

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