Which of the following is an appropriate step when identifying relevant costs to make a business
Decision?
A) assuming all variable costs are relevant
B) assuming all fixed costs are irrelevant
C) separating total costs into business function costs and full costs
D) separating total costs into variable and fixed components

Question

Quizplus · Accepted Answer

Separating total costs into variable and fixed components is an appropriate step when identifying relevant costs, as it allows for a more accurate analysis of the costs that will change based on different business decisions. Assuming all variable costs are relevant or all fixed costs are irrelevant is not appropriate, as there may be specific variable or fixed costs that are relevant to the decision at hand. Separating total costs into business function costs and full costs may be useful for other purposes, but it is not directly related to identifying relevant costs for a business decision.

Which of the Following Is an Appropriate Step When Identifying