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Select the Term from the List Provided That Best Matches

Question 136

Matching

Select the term from the list provided that best matches each of the following descriptions

Premises:

Responses:

Future oriented costs that differ between business alternatives

Avoidable costs

Costs that can be avoided when a product line or type of service is eliminated

Batch-level costs

Costs that are incurred each time a company makes a single product or performs a single service

Differential costs

Features such as company reputation, welfare of employees, and customer reaction

Low-ball pricing

Items that are future oriented and that differ between the alternatives

Opportunity costs

Setting a selling price low enough to lure customers away from competitors

Outsourcing decisions

Costs that are not relevant for decision making

Product-level costs

Costs that, for example, would include the cost of setting up machinery to produce a specific lot of units

Qualitative characteristics

The $20 variation between Alternative A, which costs $100 and Alternative B, which costs $80

Relevant costs

Revenues or cost savings that are sacrified when one alternative is chosen over another

Relevant information

Deciding to purchase a component that until now has been produced in house.

Sunk costs

Future costs that do not have to be incurred if a specified course of action is taken

Unit-level costs

Premises:

Future oriented costs that differ between business alternatives

Costs that can be avoided when a product line or type of service is eliminated

Costs that are incurred each time a company makes a single product or performs a single service

Features such as company reputation, welfare of employees, and customer reaction

Items that are future oriented and that differ between the alternatives

Setting a selling price low enough to lure customers away from competitors

Costs that are not relevant for decision making

Costs that, for example, would include the cost of setting up machinery to produce a specific lot of units

The $20 variation between Alternative A, which costs $100 and Alternative B, which costs $80

Revenues or cost savings that are sacrified when one alternative is chosen over another

Deciding to purchase a component that until now has been produced in house.

Future costs that do not have to be incurred if a specified course of action is taken

Responses:

Avoidable costs

Batch-level costs

Differential costs

Low-ball pricing

Opportunity costs

Outsourcing decisions

Product-level costs

Qualitative characteristics

Relevant costs

Relevant information

Sunk costs

Unit-level costs

Correct Answer:

Premises:

Responses:

Future oriented costs that differ between business alternatives

Costs that can be avoided when a product line or type of service is eliminated

Costs that are incurred each time a company makes a single product or performs a single service

Features such as company reputation, welfare of employees, and customer reaction

Items that are future oriented and that differ between the alternatives

Setting a selling price low enough to lure customers away from competitors

Costs that are not relevant for decision making

Costs that, for example, would include the cost of setting up machinery to produce a specific lot of units

The $20 variation between Alternative A, which costs $100 and Alternative B, which costs $80

Revenues or cost savings that are sacrified when one alternative is chosen over another

Deciding to purchase a component that until now has been produced in house.

Future costs that do not have to be incurred if a specified course of action is taken