20. T, F. In most short-term decisions where differential costs and revenues are computed and compared, the differential revenue must be greater than differential costs for the decision to be made.

True

21. T, F. Incremental Costs are those relevant costs incurred if a company pursues a decision that it plans to make.

False

22. T, F. Incremental Revenues are the additional revenues that will accrue to a company if it implements one choice of action over another.

False

23. A cost that cannot be changed because it arises from past decisions is:

a. An uncontrollable cost

b. An out-of-pocket cost

c. Incremental Cost

d. An Opportunity cost

e. None of the above.

24. The potential benefit of one alternative that is lost by choosing another is known as:

a. An alternative cost

b. A Sunk cost

c A differential cost

d. An Opportunity cost

e. An out-pocket-cost

25. T, F. In make or buy short-term decision choice, the incremental cost to make must be greater than the cost to buy.

True

26. T, F. In a short-term decision to process goods further or to sell it at split-off point, the additional cost to process further must produce greater profit than the split-off profit margin.

True

27. T, F. Under normal pricing decisions, the organization sets its price to cover all costs plus target profit margin.

False

28. T, F. Under target costing method of pricing decision, an organization sets its target cost equal to Expected Selling Price less Desired Relevant Selling Expenses.

False

5.

29. T, F. For Special Offer decision, the incremental revenue must be greater than the incremental cost for the offer to be accepted.

True

30. T, F. A Company should not eliminate a segment when its unavoidable costs increase the cost for other units in the organization.