ACCT 202- ch. 12 Learnsmart

Cost that can be eliminated in whole or part by choosing one alternative over the other is an ___ cost. a) avoidable b) sunk c) incremental

A

Joint cost are: a) irrelevant in decision regard what to do with a product after split off b) common cost that must be allocated to make decision about individual products c) economically attributable to all end product d)increased or decreased after the split off point

A

Space being used that would otherwise be idle has a(n) __________ cost of zero. a) opportunity b) differential c) incremental d) mixed

A

Differential cost include: select those that apply. a)incremental b) irrelevant c) avoidable d) sunk

A, c

Determining whether to carry out an activity in the value chain internally or use a supplier is a __ decision. a) special order b) make or buy c) product line

B

when making a decision to either buy a movie ticket or rent a DVD, the cost of the movie ticket is an example of an ____ cost? select those apply. a) irrelevant b) sunk c) avoidable d) incremental

C and D

A business segment should only be dropped if a company can save more in ___ cost than it losses in CM. a) variable b) product c)fixed d) mixed

Fixed

A one time sale that is not considered part of the company normal ongoing business is refer to as a " special Order" T or F.

T

Anything that prevent you from getting what you want is a " constraint" T or F.

T

Deciding what to do with a joint product at the split off point is an sell or process further decision. T or F.

T

When demand for product exceed the production capacity a "volume trade off must be made. T or F

T

Costs that have no impact on future cash flows and are irrelevant to decision are ___ cost. a) unavoidable b) marginal c) sunk

c

Differential revenue is an example of an ___ benefit. a) avoidable b) sunk c) relevant

c

Irrelevant cost include: select those apply. a) sunk cost b) all fix cost c) future cost that do not differ between alternatives d) future cost that differ between alternatives

A, C

Depreciation of existing assets is relevant to decision. T or F.

F ( depr. spread sunk cost across lift of assets not relevant)

if a company cannot avoid as much fixed cost as it loses in CM, the company should (keep/drop ) the product line?

keep (reduce operating income)