Question

When making decisions, managers should: 1. consider sunk costs 2. consider costs that do not differ between alternatives 3. consider only variable costs 4. consider revenues and costs that differ between alternatives.

Answer 1

Answer:Consider revenues and costs that differ between alternatives--4

Explanation: When Managers make decisions, it is necessary for them to consider revenues and costs that differ between alternatives. Differential revenues and costs typically shows the difference in revenues and costs among alternative courses of action.

Also when deciding between alternatives, they should only consider those revenues and costs that differ from one alternative such as Avoidable costs(which can be prevented by selecting a particular course of action),

Opportunity costs(the foregone benefits when one alternative is selected over another) and Direct fixed costs—( which can be traced directly to a customer)

They should bear in mind also Revenues and costs that do not differ from one alternative course of action to another are necessary for decision making.