Management accountants are frequently asked to analyze various decision situations including the following:
(1)Alternative uses of plant space,to be considered in a make/buy decision.
(2)Joint production costs incurred,to be considered in a sell-at-split-off versus a process-further decision.
(3)Research and development costs incurred in prior months,to be considered in a product-introduction decision.
(4)The cost of a special device that is necessary if a special order is accepted.
(5)The cost of obsolete inventory to be considered in a keep-versus-disposal decision.
The costs described in situations 2,3,and 5 above are:
A)Prime costs.
B)Sunk costs.
C)Discretionary costs.
D)Relevant costs.
E)Differential costs.

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The Answer of Management accountants are frequently asked to analyze various decision situations including the following:
(1)Alternative uses of plant space,to be considered in a make/buy decision.
(2)Joint production costs incurred,to be considered in a sell-at-split-off versus a process-further decision.
(3)Research and development costs incurred in prior months,to be considered in a product-introduction decision.
(4)The cost of a special device that is necessary if a special order is accepted.
(5)The cost of obsolete inventory to be considered in a keep-versus-disposal decision.
The costs described in situations 2,3,and 5 above are:
A)Prime costs.
B)Sunk costs.
C)Discretionary costs.
D)Relevant costs.
E)Differential costs.

Management Accountants Are Frequently Asked to Analyze Various Decision Situations