Question 1

The cost of a computer system installed last year is an example of:

Accepted Answer

A) a sunk cost. 
B) a relevant cost. 
C) a differential cost. 
D) an avoidable cost. 
A) a sunk cost. 
B) a relevant cost. 
C) a differential cost. 
D) an avoidable cost.

Question 2

Bid prices and costs that are relevant for regular orders are the same costs that are relevant for one-time-only special orders.

Accepted Answer

A) True 
 B)False

Question 3

Explain what revenues and costs are relevant when choosing among alternatives.

Accepted Answer

Amounts that differ among alternatives a

Question 4

A cost may be relevant for one decision,but not relevant for a different decision.

Accepted Answer

A) True 
 B)False

Question 5

Which of following are risks of outsourcing the production of a part?

Accepted Answer

A) poor quality 
B) late delivery 
C) unscheduled price increases 
D) All of the above are risks of outsourcing. 
A) poor quality 
B) late delivery 
C) unscheduled price increases 
D) All of the above are risks of outsourcing.

Question 6

Depreciation expense allocated to a product line is a relevant cost when deciding to discontinue that product.

Accepted Answer

A) True 
 B)False

Question 7

Skate Magic manufactures three different product lines, Model TS, Model AY, and Model GG. Considerable market demand exists for all models. The following per unit data apply:  
-If there is excess capacity,which model is the most profitable to produce?

Accepted Answer

A) Model TS 
B) Model AY 
C) Model GG 
D) both Models TS and AY 
A) Model TS 
B) Model AY 
C) Model GG 
D) both Models TS and AY

Question 8

The break-even point in units is:

Accepted Answer

A) total costs divided by variable costs per unit. 
B) contribution margin per unit divided by revenue per unit. 
C) fixed costs divided by contribution margin per unit. 
D) (fixed costs plus variable costs)divided by contribution margin per unit. 
A) total costs divided by variable costs per unit. 
B) contribution margin per unit divided by revenue per unit. 
C) fixed costs divided by contribution margin per unit. 
D) (fixed costs plus variable costs)divided by contribution margin per unit.

The cost of a computer system installed last year is an example of:

Bid prices and costs that are relevant for regular orders are the same costs that are relevant for one-time-only special orders.

Explain what revenues and costs are relevant when choosing among alternatives.

A cost may be relevant for one decision,but not relevant for a different decision.

Which of following are risks of outsourcing the production of a part?

Depreciation expense allocated to a product line is a relevant cost when deciding to discontinue that product.

Skate Magic manufactures three different product lines, Model TS, Model AY, and Model GG. Considerable market demand exists for all models. The following per unit data apply: -If there is excess capacity,which model is the most profitable to produce?

The break-even point in units is:

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters

Exam 3: Using Costs in Decision Making

The cost of a computer system installed last year is an example of:

Bid prices and costs that are relevant for regular orders are the same costs that are relevant for one-time-only special orders.

Explain what revenues and costs are relevant when choosing among alternatives.

A cost may be relevant for one decision,but not relevant for a different decision.

Which of following are risks of outsourcing the production of a part?

Depreciation expense allocated to a product line is a relevant cost when deciding to discontinue that product.

Skate Magic manufactures three different product lines, Model TS, Model AY, and Model GG. Considerable market demand exists for all models. The following per unit data apply: -If there is excess capacity,which model is the most profitable to produce?

The break-even point in units is:

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters