For short-run product-mix decisions, relevant costs (for the seller) include short-run ________ costs plus any ________ costs.
A) direct material; unavoidable fixed
B) out-of-pocket; opportunity
C) fixed; differential
D) support; distribution
E) capital; opportunity

Question

Quizplus · Accepted Answer

Short-run product-mix decisions focus on the immediate production and sales of goods. Therefore, the relevant costs for the seller would be the out-of-pocket costs (direct materials, labor, etc.) required for producing the units, along with any opportunity costs associated with producing a specific mix of products. Unavoidable fixed costs, differential costs, support costs, distribution costs, and capital costs may be relevant in long-run decisions, but they are not necessarily relevant in short-run product-mix decisions.

For Short-Run Product-Mix Decisions, Relevant Costs (For the Seller) Include