Short-Run Decision Making

What is the primary focus of short-run decision making?

• Immediate needs and circumstances

• Long-term strategic planning

• Historical cost analysis

• Future market predictions

Which type of cost is considered when making a decision that affects only future outcomes?

• Relevant cost

• Fixed cost

• Sunk cost

• Variable cost

What is an avoidable cost?

• A cost that cannot be changed by any decision

• A cost that is fixed regardless of the decision

• A cost that has already been incurred

• A cost that can be eliminated by choosing a different option

How does opportunity cost influence decision making?

• It considers the benefits of the chosen option only

• It focuses on unavoidable costs

• It evaluates the cost of past decisions

• It assesses the value of the best alternative foregone

In short-run decision making, what is the typical time frame considered for accounting purposes?

• Over 5 years

• Under 12 months

• Between 1 to 3 years

• More than 12 months