Assertion (A): Only the relevant costs should be taken into consideration for decision-making.
Reason (R): All variable costs are relevant costs, and all fixed costs are irrelevant costs.
A. Both (A) and (R) are correct
B. (A) is correct, but (R) is incorrect
C. (R) is correct, but (A) is incorrect
D. Both (A) and (R) are incorrect
Answer: Option B
Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
Join The Discussion