Which of the following are potential problems managers face in relevant-cost analysis?
A) Including only relevant costs and relevant revenues in an analysis
B) incorrect assumptions such as all variable costs are relevant and all fixed costs are not
C) considering past historical costs when making predictions about future costs
D) examining differences in expected total future revenues and expected total future costs among alternatives

Question

Quizplus · Accepted Answer

The incorrect assumptions mentioned in option B are potential problems that managers may face in relevant-cost analysis. In reality, some fixed costs may be relevant, while some variable costs may not be relevant. Therefore, it's essential to have a clear understanding of which costs are relevant and which are not. The other options are not potential problems in relevant-cost analysis; instead, they are the factors that managers consider while performing relevant-cost analysis.

Which of the Following Are Potential Problems Managers Face in Relevant-Cost