seek to uphold human rights standards, enforcement is often limited due to political
and legal complexities.The legal framework provided by international treaties, such as
the Universal Declaration of Human Rights, and judicial bodies like the International
Criminal Court (ICC) offer mechanisms for holding violators accountable. However,
international law’s power is limited by the willingness of states to cooperate, and
powerful nations may resist accountability for their actions, creating legal loopholes that
undermine the effectiveness of global human rights protections.#### 8.2 **War and
Military Interventions**Military interventions, whether for humanitarian reasons or in
response to threats, pose significant ethical and legal challenges.
Cost Accounting, Cdn. Ed., 7e (Horngren)
Chapter 11 Decision Making and Relevant Information
11.1 Distinguish relevant from irrelevant information in decision situations.
1) A decision model is a formal method of making a choice that uses only quantitative analyses.
Answer: FALSE
Explanation: A decision model is a formal method of making a choice that often involves both
quantitative and qualitative analyses.
Diff: 1 Type: TF
Skill: Remember
Objective: LO 11-1
11.2 Identify the differences among relevant costs for short-term and long-term production output
decisions.
1) The purpose of evaluating performance in the decision process is to provide feedback.
Answer: TRUE
Diff: 1 Type: TF
Skill: Remember
Objective: LO 11-2
2) Anticipated future costs that differ with alternative courses of action are known as relevant costs.
Answer: TRUE
Diff: 1 Type: TF
Skill: Remember
Objective: LO 11-2
3) Divisional revenues which remain at the same level from year to year are known as relevant revenues.
Answer: FALSE
Explanation: Relevant revenues are expected future revenues.
Diff: 2 Type: TF
Skill: Remember
Objective: LO 11-2
4) The total cost difference between two separate alternatives in a decision making process is the net
relevant cost.
Answer: TRUE
Diff: 2 Type: TF
Skill: Understand
Objective: LO 11-2
5) Each item included in the relevant-cost analysis should differ according to the alternative being
,considered and be an expected future revenue or cost.
Answer: TRUE
Diff: 2 Type: TF
Skill: Remember
Objective: LO 11-2
6) When choosing between two alternatives, costs that do not differ between the two alternatives can be
considered to be irrelevant to that decision.
Answer: TRUE
Diff: 1 Type: TF
Skill: Remember
Objective: LO 11-2
7) All fixed costs are irrelevant in relevant-cost analysis.
Answer: FALSE
Explanation: Fixed costs that occur in the future or are different between alternatives are relevant.
Diff: 2 Type: TF
Skill: Understand
Objective: LO 11-2
seek to uphold human rights standards, enforcement is often limited due to political and legal
complexities.The legal framework provided by international treaties, such as the Universal
Declaration of Human Rights, and judicial bodies like the International Criminal Court (ICC) offer
mechanisms for holding violators accountable. However, international law’s power is limited by
the willingness of states to cooperate, and powerful nations may resist accountability for their
actions, creating legal loopholes that undermine the effectiveness of global human rights
protections.#### 8.2 **War and Military Interventions**Military interventions, whether for
humanitarian reasons or in response to threats, pose significant ethical and legal challenges.
8) All variable costs are relevant in relevant-cost analysis.
Answer: FALSE
Explanation: Fixed costs that occur in the future or are different between alternatives are relevant.
Diff: 2 Type: TF
Skill: Understand
Objective: LO 11-2
9) The last step in the decision process is normally to
A) evaluate and explain outcomes.
B) make assumptions and predictions.
C) choose alternatives.
D) perform quantitative analysis.
E) gather information.
Answer: A
Diff: 2 Type: MC
Skill: Understand
Objective: LO 11-2
10) The feedback obtained in the decision process cannot affect
A) future predictions.
B) the prediction method.
C) the decision model.
D) implementation.
, E) past performance.
Answer: E
Diff: 2 Type: MC
Skill: Understand
Objective: LO 11-1
11) The Gameshop manufactures specialized board games. Management is attempting to search for ways
to reduce costs and is considering two alternatives for an upcoming project of special games that must be
delivered to the customer in 12 months' time. Management agreed to the special project job as they have
an idle plant that is scheduled for demolition 18 months from now, and either alternative will easily meet
the delivery deadline.
seek to uphold human rights standards, enforcement is often limited due to political and legal
complexities.The legal framework provided by international treaties, such as the Universal
Declaration of Human Rights, and judicial bodies like the International Criminal Court (ICC) offer
mechanisms for holding violators accountable. However, international law’s power is limited by
the willingness of states to cooperate, and powerful nations may resist accountability for their
actions, creating legal loopholes that undermine the effectiveness of global human rights
protections.#### 8.2 **War and Military Interventions**Military interventions, whether for
humanitarian reasons or in response to threats, pose significant ethical and legal challenges.
Alternative 1 requires 10 machine operators and 2.5 individuals to handle direct materials. Employee pay
averages $17.50 per hour and will increase to $18.50 at the mid-point (July 1) of next year. Each employee
currently works 2,500 hours but will decrease to 2,400 hours if Alternative 2 is implemented. The second
proposal only requires 8.5 workers.
Which of the following items of information are relevant to this decision?
A) property taxes for the idle plant
B) hourly wage rates
C) the timing of the wage increase
D) the number of employees required in each alternative
E) the delivery deadline
Answer: D
Explanation: D) Note: none of the other items differ between the available alternative.
Diff: 2 Type: MC
Skill: Understand
Objective: LO 11-2
12) Which of the following anticipated future costs always differ among alternative courses of actions?
A) direct labour costs
B) historical costs
C) relevant costs
D) direct materials costs
E) indirect costs
Answer: C
Diff: 1 Type: MC
Skill: Remember
Objective: LO 11-1
13) When making decisions, it is best to use
A) average costs.
B) fixed costs that would be incurred.
C) unit cost, rather than total cost.
D) variable costs that would be incurred.
, E) relevant costs.
Answer: E
Diff: 1 Type: MC
Skill: Remember
Objective: LO 11-1
14) Which of the following should management consider to avoid the pitfalls of relevant-cost analysis?
A) Consider all current revenues and costs.
B) Include any item of revenue or cost that is either an expected future revenue or expected future cost,
and, differs between the alternatives.
C) Historic revenues and costs for items that differ according to alternatives should be considered.
D) Assume that all fixed costs are irrelevant.
E) Assume that all variable costs are relevant.
Answer: B
Diff: 2 Type: MC
Skill: Remember
Objective: LO 11-2
seek to uphold human rights standards, enforcement is often limited due to political and legal
complexities.The legal framework provided by international treaties, such as the Universal
Declaration of Human Rights, and judicial bodies like the International Criminal Court (ICC) offer
mechanisms for holding violators accountable. However, international law’s power is limited by
the willingness of states to cooperate, and powerful nations may resist accountability for their
actions, creating legal loopholes that undermine the effectiveness of global human rights
protections.#### 8.2 **War and Military Interventions**Military interventions, whether for
humanitarian reasons or in response to threats, pose significant ethical and legal challenges.
15) Sunk costs
A) are relevant.
B) are differential.
C) have future implications.
D) are ignored when evaluating alternatives.
E) are evaluated to determine if they are relevant or not evaluating alternatives.
Answer: D
Diff: 1 Type: MC
Skill: Remember
Objective: LO 11-2
16) Past costs that are unavoidable and unchangeable are known as
A) fixed overhead costs.
B) operating costs.
C) product production costs.
D) sunk costs.
E) constraining costs.
Answer: D
Diff: 1 Type: MC
Skill: Remember
Objective: LO 11-2
17) A computer system installed last year is an example of a(n)
A) sunk cost.
B) relevant cost.
and legal complexities.The legal framework provided by international treaties, such as
the Universal Declaration of Human Rights, and judicial bodies like the International
Criminal Court (ICC) offer mechanisms for holding violators accountable. However,
international law’s power is limited by the willingness of states to cooperate, and
powerful nations may resist accountability for their actions, creating legal loopholes that
undermine the effectiveness of global human rights protections.#### 8.2 **War and
Military Interventions**Military interventions, whether for humanitarian reasons or in
response to threats, pose significant ethical and legal challenges.
Cost Accounting, Cdn. Ed., 7e (Horngren)
Chapter 11 Decision Making and Relevant Information
11.1 Distinguish relevant from irrelevant information in decision situations.
1) A decision model is a formal method of making a choice that uses only quantitative analyses.
Answer: FALSE
Explanation: A decision model is a formal method of making a choice that often involves both
quantitative and qualitative analyses.
Diff: 1 Type: TF
Skill: Remember
Objective: LO 11-1
11.2 Identify the differences among relevant costs for short-term and long-term production output
decisions.
1) The purpose of evaluating performance in the decision process is to provide feedback.
Answer: TRUE
Diff: 1 Type: TF
Skill: Remember
Objective: LO 11-2
2) Anticipated future costs that differ with alternative courses of action are known as relevant costs.
Answer: TRUE
Diff: 1 Type: TF
Skill: Remember
Objective: LO 11-2
3) Divisional revenues which remain at the same level from year to year are known as relevant revenues.
Answer: FALSE
Explanation: Relevant revenues are expected future revenues.
Diff: 2 Type: TF
Skill: Remember
Objective: LO 11-2
4) The total cost difference between two separate alternatives in a decision making process is the net
relevant cost.
Answer: TRUE
Diff: 2 Type: TF
Skill: Understand
Objective: LO 11-2
5) Each item included in the relevant-cost analysis should differ according to the alternative being
,considered and be an expected future revenue or cost.
Answer: TRUE
Diff: 2 Type: TF
Skill: Remember
Objective: LO 11-2
6) When choosing between two alternatives, costs that do not differ between the two alternatives can be
considered to be irrelevant to that decision.
Answer: TRUE
Diff: 1 Type: TF
Skill: Remember
Objective: LO 11-2
7) All fixed costs are irrelevant in relevant-cost analysis.
Answer: FALSE
Explanation: Fixed costs that occur in the future or are different between alternatives are relevant.
Diff: 2 Type: TF
Skill: Understand
Objective: LO 11-2
seek to uphold human rights standards, enforcement is often limited due to political and legal
complexities.The legal framework provided by international treaties, such as the Universal
Declaration of Human Rights, and judicial bodies like the International Criminal Court (ICC) offer
mechanisms for holding violators accountable. However, international law’s power is limited by
the willingness of states to cooperate, and powerful nations may resist accountability for their
actions, creating legal loopholes that undermine the effectiveness of global human rights
protections.#### 8.2 **War and Military Interventions**Military interventions, whether for
humanitarian reasons or in response to threats, pose significant ethical and legal challenges.
8) All variable costs are relevant in relevant-cost analysis.
Answer: FALSE
Explanation: Fixed costs that occur in the future or are different between alternatives are relevant.
Diff: 2 Type: TF
Skill: Understand
Objective: LO 11-2
9) The last step in the decision process is normally to
A) evaluate and explain outcomes.
B) make assumptions and predictions.
C) choose alternatives.
D) perform quantitative analysis.
E) gather information.
Answer: A
Diff: 2 Type: MC
Skill: Understand
Objective: LO 11-2
10) The feedback obtained in the decision process cannot affect
A) future predictions.
B) the prediction method.
C) the decision model.
D) implementation.
, E) past performance.
Answer: E
Diff: 2 Type: MC
Skill: Understand
Objective: LO 11-1
11) The Gameshop manufactures specialized board games. Management is attempting to search for ways
to reduce costs and is considering two alternatives for an upcoming project of special games that must be
delivered to the customer in 12 months' time. Management agreed to the special project job as they have
an idle plant that is scheduled for demolition 18 months from now, and either alternative will easily meet
the delivery deadline.
seek to uphold human rights standards, enforcement is often limited due to political and legal
complexities.The legal framework provided by international treaties, such as the Universal
Declaration of Human Rights, and judicial bodies like the International Criminal Court (ICC) offer
mechanisms for holding violators accountable. However, international law’s power is limited by
the willingness of states to cooperate, and powerful nations may resist accountability for their
actions, creating legal loopholes that undermine the effectiveness of global human rights
protections.#### 8.2 **War and Military Interventions**Military interventions, whether for
humanitarian reasons or in response to threats, pose significant ethical and legal challenges.
Alternative 1 requires 10 machine operators and 2.5 individuals to handle direct materials. Employee pay
averages $17.50 per hour and will increase to $18.50 at the mid-point (July 1) of next year. Each employee
currently works 2,500 hours but will decrease to 2,400 hours if Alternative 2 is implemented. The second
proposal only requires 8.5 workers.
Which of the following items of information are relevant to this decision?
A) property taxes for the idle plant
B) hourly wage rates
C) the timing of the wage increase
D) the number of employees required in each alternative
E) the delivery deadline
Answer: D
Explanation: D) Note: none of the other items differ between the available alternative.
Diff: 2 Type: MC
Skill: Understand
Objective: LO 11-2
12) Which of the following anticipated future costs always differ among alternative courses of actions?
A) direct labour costs
B) historical costs
C) relevant costs
D) direct materials costs
E) indirect costs
Answer: C
Diff: 1 Type: MC
Skill: Remember
Objective: LO 11-1
13) When making decisions, it is best to use
A) average costs.
B) fixed costs that would be incurred.
C) unit cost, rather than total cost.
D) variable costs that would be incurred.
, E) relevant costs.
Answer: E
Diff: 1 Type: MC
Skill: Remember
Objective: LO 11-1
14) Which of the following should management consider to avoid the pitfalls of relevant-cost analysis?
A) Consider all current revenues and costs.
B) Include any item of revenue or cost that is either an expected future revenue or expected future cost,
and, differs between the alternatives.
C) Historic revenues and costs for items that differ according to alternatives should be considered.
D) Assume that all fixed costs are irrelevant.
E) Assume that all variable costs are relevant.
Answer: B
Diff: 2 Type: MC
Skill: Remember
Objective: LO 11-2
seek to uphold human rights standards, enforcement is often limited due to political and legal
complexities.The legal framework provided by international treaties, such as the Universal
Declaration of Human Rights, and judicial bodies like the International Criminal Court (ICC) offer
mechanisms for holding violators accountable. However, international law’s power is limited by
the willingness of states to cooperate, and powerful nations may resist accountability for their
actions, creating legal loopholes that undermine the effectiveness of global human rights
protections.#### 8.2 **War and Military Interventions**Military interventions, whether for
humanitarian reasons or in response to threats, pose significant ethical and legal challenges.
15) Sunk costs
A) are relevant.
B) are differential.
C) have future implications.
D) are ignored when evaluating alternatives.
E) are evaluated to determine if they are relevant or not evaluating alternatives.
Answer: D
Diff: 1 Type: MC
Skill: Remember
Objective: LO 11-2
16) Past costs that are unavoidable and unchangeable are known as
A) fixed overhead costs.
B) operating costs.
C) product production costs.
D) sunk costs.
E) constraining costs.
Answer: D
Diff: 1 Type: MC
Skill: Remember
Objective: LO 11-2
17) A computer system installed last year is an example of a(n)
A) sunk cost.
B) relevant cost.
