Asked by
natalia tupaz
on Oct 23, 2024
Verified
Which of the following statements regarding short-term decisions is true?
A) Fixed costs must only be considered on a per unit basis.
B) Fixed costs will actually behave as variable costs when they are unitised for special decisions.
C) Unitised fixed costs are valid only for make or buy decisions.
D) Unitised fixed costs are misleading because they appear to behave as variable costs when in fact they are not.
Fixed Costs
Expenses that do not change with the level of production or sales in the short term, such as rent, salaries, or insurance premiums.
Unitised
Refers to the conversion of a product or service into quantifiable units, typically for ease of calculation, tracking, or comparison.
Special Decisions
Decisions made in unique or non-recurring situations requiring specific analysis or responses.
- Familiarize oneself with the concepts of differential analysis and its advantages in the context of decision-making.
- Familiarize oneself with the concept of sunk costs and their non-importance in the context of future decision-making.
Verified Answer
FW
Learning Objectives
- Familiarize oneself with the concepts of differential analysis and its advantages in the context of decision-making.
- Familiarize oneself with the concept of sunk costs and their non-importance in the context of future decision-making.