Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Question
Chapter 8, Problem 1QC
To determine
To identify: The appropriate answer for the given statement
Expert Solution & Answer
Answer to Problem 1QC
Option a. The false statement is relevant information is always financial in nature.
Explanation of Solution
Relevant Information
Relevant Information is the information which is useful for the managers to make decisions.
a.
Relevant information is always financial in nature.
Relevant information is not always financial in nature. It also considers nonfinancial aspects to take a decision. Thus, the given statement is false.
b.
Relevant information always regards the future.
This is one of the characteristics of the relevant information that it always considers future for taking the decisions. This is the true statement.
c.
Sunk costs are never relevant to a decision.
Sunk costs are the cost that is incurred in the past and cannot be changed in future. This means it doesn’t consider the future and hence is never relevant to a decision. Hence, the statement is true.
d.
Relevant information always differs among alternatives.
This is also one of the characteristics of relevant information that it is different for different alternative decisions. Therefore, the given statement is not false.
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Students have asked these similar questions
Indicate whether each statement is true or false.
1.a)Information is relevant to a decision problem when it has a bearing on the future and it differs among competing alternatives. (……….)1.b)Irrelevant future costs and benefits are not ignored when analyzing alternative decisions. (……….)
Postpurchase dissonance is a function of
a. None of the mentioned
b. The difficulty of choosing among the alternatives
c. The degree of commitment or irrevocability of the decision
d. All of the mentioned
e. The importance of the decision to the consumer
Match each of the following terms with the best definition.
A. Theory of constraints
B. Sunk cost
C. Differential analysis
D. Opportunity cost
- Strategy that focuses on reducing bottlenecks.
- Revenue forgone from an alternative use of an asset.
- Not relevant to future decisions.
- Evaluation of how income will change based on an alternative course of action.
Chapter 8 Solutions
Managerial Accounting (5th Edition)
Ch. 8 - Prob. 1QCCh. 8 - (Learning Objective 1) Keys to making short-term...Ch. 8 - (Learning Objective 2) Which is true of...Ch. 8 - (Learning Objective 3) Which of the following...Ch. 8 - Prob. 5QCCh. 8 - Prob. 6QCCh. 8 - (Learning Objective 4) A segment margin is the a....Ch. 8 - (Learning Objective 5) When resources are...Ch. 8 - (Learning Objective 6) Which of the following is...Ch. 8 - Prob. 10QC
Ch. 8 - Determine relevance of information (Learning...Ch. 8 - Prob. 8.2SECh. 8 - Prob. 8.3SECh. 8 - Prob. 8.4SECh. 8 - Prob. 8.5SECh. 8 - Prob. 8.6SECh. 8 - Prob. 8.7SECh. 8 - Prob. 8.8SECh. 8 - Product mix decision: Unlimited demand (Learning...Ch. 8 - Prob. 8.10SECh. 8 - Outsourcing production decision (Learning...Ch. 8 - Relevant information for outsourcing delivery...Ch. 8 - Prob. 8.13SECh. 8 - Prob. 8.14SECh. 8 - Prob. 8.15SECh. 8 - Determine relevant and irrelevant information...Ch. 8 - SUSTAINABILITY ES-17A Sustainability and...Ch. 8 - Prob. 8.18AECh. 8 - Prob. 8.19AECh. 8 - Analyze special order decision (Learning Objective...Ch. 8 - Prob. 8.21AECh. 8 - Prob. 8.22AECh. 8 - Prob. 8.23AECh. 8 - Discontinuing a product line (Learning Objective...Ch. 8 - Prob. 8.25AECh. 8 - Determine product mix for retailertwo stocking...Ch. 8 - Prob. 8.27AECh. 8 - Make-or-buy product component (Learning Objective...Ch. 8 - Prob. 8.29AECh. 8 - Prob. 8.30AECh. 8 - Prob. 8.31AECh. 8 - Prob. 8.32BECh. 8 - Prob. 8.33BECh. 8 - Prob. 8.34BECh. 8 - Prob. 8.35BECh. 8 - Prob. 8.36BECh. 8 - Prob. 8.37BECh. 8 - Prob. 8.38BECh. 8 - Prob. 8.39BECh. 8 - Prob. 8.40BECh. 8 - Identify constraint, then determine product mix...Ch. 8 - Determine product mix for retailertwo stocking...Ch. 8 - Prob. 8.43BECh. 8 - Prob. 8.44BECh. 8 - Prob. 8.45BECh. 8 - Determine maximum outsourcing price (Learning...Ch. 8 - Prob. 8.47BECh. 8 - Prob. 8.48APCh. 8 - Special order decision and considerations...Ch. 8 - Prepare and use contribution margin statements for...Ch. 8 - Product mix decision under constraint (Learning...Ch. 8 - Outsourcing decision given alternative use of...Ch. 8 - Prob. 8.53APCh. 8 - Prob. 8.54BPCh. 8 - Prob. 8.55BPCh. 8 - Prepare and use contribution margin statements for...Ch. 8 - Prob. 8.57BPCh. 8 - Prob. 8.58BPCh. 8 - Prob. 8.59BPCh. 8 - Decide whether to discontinue a department...Ch. 8 - Prob. 8.61ACTCh. 8 - Outsourcing Decision at a Real Company Go to the...Ch. 8 - Prob. 8.63ACTCh. 8 - Prob. 8.64ACT
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Similar questions
- Future costs that do not differ among the alternatives are not relevant in a decision. True or False True Falsearrow_forwardWhich type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making? A. avoidable costs B. unavoidable costs C. sunk costs D. differential costsarrow_forwardWhich statement is incorrect concerning the constraint on relevant and reliable information? * A. Information may be relevant but so unreliable in nature or representation that its recognition may be potentially misleading. B. The balance between benefit and cost is a pervasive constraint which means that the benefits derived from the information should exceed the cost of providing it. C. If there is undue delay in the reporting of information, it may lose its relevance and reliability. D. In achieving a balance between relevance and reliability, the overriding consideration is how best to satisfy the economic decision-making needs of users.arrow_forward
- Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making? Group of answer choices A. avoidable costs B. unavoidable costs C. sunk costs D. differential costsarrow_forwardFuture costs that do not differ among the alternatives at hand are not relevant in the given decision-making situation. true or false? please answer immediatelyarrow_forwardOne cost that is irrelevant in decision making is a sunk cost Group of answer choices True Falsearrow_forward
- Any cost that is avoidable is relevant for decision purposes. O A. True O B. Falsearrow_forwardWhich of the following costs can be ignored when making a decision?a. Opportunity costs. b. Differential costs. c. Sunk costs. d. Relevant costs.arrow_forwardThe definition of Materiality is: c. accuracy is always the most important consideration regardless of cost a. amount is large enough to have a significant impact on financial statements Od. IFRS is more authoritative than GAAP b. mistakes don't need to be corrected Silarrow_forward
- Which of the following statements about a sunk cost is false? Question 11Answer a. It is relevant to future decisions b. It will not be impacted by any future decisions c. It cannot be changed d. It is a cost that has already been paid forarrow_forward1. What factors determine the relevance of information to decision making? 2. What are sunk costs, and why are they not relevant in making decisions? 3. What information is relevant in an outsourcing decision?arrow_forwardEach of the following are true of relevant information except O different alternatives can be compared by examining đifferences in expected future revernues and expected ta cas O past costs are helpful when making predictions but not relevant when making decisions O significant past investment amounts are relevant to decision making O not all future revenues and expenses are relevantarrow_forward
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