For each numbered Statment, pick the lettered Cost Term that fits

Statements:

(1.) Increased revenues from special order

(2.) Lost contribution margin from foregone sales to regular customers

(3.) Revenues from 4,000 units sold to regular customers

(4.) Variable cost of 4,000 units sold to regular customers

(5.) Increase in fixed selling and administrative expenses

(6.) Cost of existing equipment used to produce special order

(7.) Salary paid to current supervisor who oversees manufacture of special order

(8.) Increased variable costs of special order

Cost Term Choices:

a) Irrelevant fixed outlay cost

b) Irrelevant revenues

c) Irrelevant variable outlay cost

d) Opportunity cost

e) Relevant fixed outlay cost

f) Relevant revenues

g) Relevant variable outlay costs

h) Sunk Cost

Respuesta :

Zviko

Answer:

1.b) Irrelevant revenues

2.d) Opportunity cost

3.b) Irrelevant revenues

4.c) Irrelevant variable outlay cost

5.e) Relevant fixed outlay cost

6.h) Sunk Cost

7.a) Irrelevant fixed outlay cost

8.g) Relevant variable outlay costs

Explanation:

Relevant Cost or Revenues are future cost or revenues that will change as a result of a decision that is made today.

Irrelevant Cost or Revenues are costs or revenues that are common and thus would not be different for any alternative taken in a decision.

Sunk Costs are costs that were already incurred in the past.