Question

Q1) The statement that not correctly describes  the differential costs is

		Differential costs are considered in the decision making process
		also called incremental costs.
		The cost that differs between two alternatives.
		The benefit that is in  one  alternative over another

Q2)  

The site manager told you that the variable frequency drive (VFD) for a  265 -hp motor costs $34,960. And the cost estimate possible for the VFD for a 129-hp motor is $3,163. The exponent x in the cost-capacity equation is

Q3)

Which of the following costs would be variable with respect to the number of coffee cups  sold at a sta bucks  shop? (There may be more than one correct answer.)

		The cost of lighting the store.
		The wages of the store manager.
		The cost of disposable cups
		The cost of coffee beans

Answer 1

Q1)

Differential cost is the cost incurred in excess of a specified level cost as a reason of acceptance of another unit, another process. It is a relevant cost and used in decision making.

Hence, correct option is “The benefit that is in one alternative over another”