1. Accepting a special order is profitable whenever the revenue from the special order exceeds:

Multiple Choice

• The average unit cost of production multiplied by the number of units in the order.

• The incremental cost of producing the order.

• The materials and direct labor costs of producing the order.

• The fixed manufacturing costs for the period.

2.

Which of the following types of cost are always relevant to a decision?

Multiple Choice

• Sunk costs

• Average costs

• Incremental costs

• Fixed costs

3.

A cost that has already been incurred and cannot be changed is called a(n):

Multiple Choice

• Opportunity cost.

• Out-of-pocket cost.

• Joint cost.

• Sunk cost.