Question

Which of the following statements regarding differential costs is (are) false? (A) The full-cost fallacy occurs when a decision-maker fails to include fixed manufacturing overhead in the product's cost. (B) When deciding whether or not to accept a special order, a decision-maker should focus on differential costs instead of full costs.

Answer 1

The answer is A. The full-cost fallacy occurs when a decision-maker fails to include fixed manufacturing overhead in the product's cost.

Step-by-step explanation: