Which of the following statements regarding differential costs is (are) false?
(A) The full-cost fallacy occurs when a decision-maker fails to include fixed manufacturing overhead in the product's cost.
(B) When deciding whether or not to accept a special order, a decision-maker should focus on differential costs instead of full costs.
A) Only A.
B) Only B.
C) Neither A nor B is false.
D) Both A and B are false.

Question

Quizplus · Accepted Answer

The full-cost fallacy occurs when a decision-maker incorrectly includes fixed costs in decision-making for special orders, not when they fail to include them.

Which of the Following Statements Regarding Differential Costs Is (Are)