Asked by Kaylan Hager on May 14, 2024
Verified
Variable costs are always relevant costs in decisions.
Variable Costs
These are expenses that vary directly with changes in production volume or activity level.
Relevant Costs
Costs that should be considered when making a decision because they will be affected by the decision; these costs are future-oriented and differ among alternatives.
- Develop an understanding of how to differentiate important costs from unimportant ones in decision-making processes.
- Identify the role of variable and fixed costs in various decisions.
Verified Answer
JS
Jenin ShajuMay 16, 2024
Final Answer :
False
Explanation :
Variable costs are often relevant in decision-making because they can change with the level of output or activity. However, they are not always relevant; for example, if a cost does not change between decision alternatives, it may not be relevant to the decision.
Learning Objectives
- Develop an understanding of how to differentiate important costs from unimportant ones in decision-making processes.
- Identify the role of variable and fixed costs in various decisions.
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