1. Select the correct statement regarding relevant costs and revenues.

Relevant costs are also known as unavoidable costs.

Relevant costs are only those that are based on past experience.

Relevant revenues must differ between the alternatives..

All of these.

2 .Ann is trying to decide which one of two job offers she will accept. Several items are presented below: Select the items that are irrelevant to Ann's decision.

(1), (2), (3), (4), (5)

(2), (3), (4)

(1), (3), (5)

(2), (4)

3.Which of the following is not a possible alternate term for costs that can be eliminated by taking a specified course of action?

Avoidable costs

Opportunity costs

Relevant costs

Differential costs

4. For purposes of decision making, avoidable costs are costs that:

were incurred in the past.

will not be incurred in the future, regardless of the alternative chosen.

differ between alternatives.

None of these

5. Scholastic Tours is trying to decide which one of two tours it will introduce. The costs and revenues associated with each alternative are listed below: What are the incremental (differential) costs of the Western Tour?

$4,000

$6,000

$8,000

None of these.

(1) Base salary (2) Overtime compensation (3) Moving allowance (4) Signing bonus (5) Job search costs incurred Job Offer A $50,000 Comp. time $ 3,000 $ 2,000 $ 300 Job Offer B $50,000 Hourly rate $ 3,000 $ 0 $ 500 Projected revenue Variable costs Fixed costs Profit Eastern Tour Western Tour $ 14,000 $ 18,000 2,000 10,000 6,000 6,000 $ 6,000 $ 2,000