Statements regarding differential costs


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 manufacturingoverhead 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

  • only A.
  • only B.
  • neither A nor B is false.
  • both A and B are true.

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Accounting Basics: Statements regarding differential costs
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