Management Accounting - Study Mode

[#291] In corporate costs, cost incurred to finance construction of new equipment are classified as
Correct Answer

(A) treasury costs

Explanation

Solution: In corporate costs, cost incurred to finance construction of new equipment are classified as treasury costs.

[#292] third step in decision making process is
Correct Answer

(C) making predictions

Explanation

Solution: Third step in decision making process is making predictions. A step-by-step approach to the decision making process is an efficient way to make thoughtful, informed decisions.

[#293] As compared to irrelevant cost, occurrence of relevant costs must
Correct Answer

(B) be in future

Explanation

Solution: As compared to irrelevant cost, occurrence of relevant costs must be in future. Relevant costs are affected by a new decision. Irrelevant costs have to be incurred irrespective of a new decision. The relevant costs affect the future cash flows, whereas the irrelevant costs do not affect future cash flows.

[#294] Decisions made by team of individuals or single person, whether to outsource products or in-source are classified as
Correct Answer

(B) make or buy decisions

Explanation

Solution: Decisions made by team of individuals or single person, whether to outsource products or in-source are classified as relevant or irrelevant decision.

[#295] Difference that exists between total revenues, can be earned from two different alternatives is termed as
Correct Answer

(C) differential revenue

Explanation

Solution: Difference that exists between total revenues, can be earned from two different alternatives is termed as differential revenue. Differential revenue is the difference in sales that will be generated by two different courses of action. The concept is commonly used when evaluating which of two (or more) investments to make in a business.