chap 16 relevant costs

In considering whether or not to start up your own business, your current salary would be:

• A sunk cost

• An incremental cost

• An irrelevant cost

• An opportunity cost

Which or the following statements Is NOT true?

• Relevant costs change according to the decision

• Relevant costs are always future costs

• Fixed costs can never be relevant costs

• Relevant costs are those specific to a decision

The cost of an asset acquired three months ago is a good example of:

• sunk cost

• relevant cost

• notional cost

• avoidable cost

A cost where no actual cash expenditure is incurred is better known as

• avoidable cost

• non-valued cost

• historical cost

• notional cost

Which of the following is NOT a relevant cost for decision making?

• Differential cost

• Opportunity cost

• Committed cost

• Incremental cost