Chapter 11 objective 2

Full costs of a product are the sum of _____.

All variable and fixed costs in all the business functions of the values chain.

When making decisons

Appropriate weight must be given to both quantitative and qualitative factors

Sunk costs are _____

Are ignored when evaluating alternatives

Sunk costs _____.

Are ignored when evaluating alternatives.

Sunk costs _____.

Are irrelevant for decisions making

Quantitative factors _______.

Can be expressed in monetary terms

An example of a qualitative factor for the decision-making process is _____.

Customer satisfactions

When deciding to accept a one-time special order from a wholesaler, management should ______.

Determine whether excess capacity is available

Relevant costs are ________.

Expected future cost

The best way to avoid misidentification of relevant costs is to focus on _____.

Expected future costs that differ among the alternatives

Which of the following costs is irrelevant in the decision making of a special order when there is idle production capacity

Fixed manufacturing costs

A relevant revenues is revenues that is a(n) ______.

Future revenue

Factors used to decide whether to outsource a part include ________.

If the supplier's cost is reliable

Qualitative factors _______.

Includes customer satisfaction

One-time-only special order should only be accepted if ____.

Incremental revenues exceed incremental costs

When there is an excess capacity, it makes sense to accept a one-time-only special order for less than the current selling price if _______.

Incremental revenues exceed incremental costs.

Which of the following costs is NOT considered to calculate the minimum acceptable price of a one-time-only special order?

Marketing Costs

Unit cost data can most mislead decisions by ______.

Not computing unit cost at the same time output level

Which of the following is true of relevant information

Past costs are not relevant

Roberto owns a small body shop. His major costs include labor, parts, and rent. in the decision making process. these costs are considered to be ______.

Quantitative factors

Other than price, what other items should Contrafic's Kitchens consider before accepting this one-time-only special order?

Reaction of existing customers to the lower price offered to Mr. Louis Cifer

In evaluating different alternatives, it us useful to concentrate on _______.

Relevant costs

Which of the following costs always differs among future alternatives?

Relevant costs

Which of the following is an appropriate step when identifying relevant cost to make a business decisions?

Separating total costs in variable and fixed component.

Business function costs are _____.

The sum of all variable and fixed costs in a particular business function of the value chain

Which of the following is true of historical costs?

They are useful for making future predictions

Which of the following costs is relevant in a decision-making process?

Variable costs

Which of the following is an example of sunk cost?

Wages to security staff

For decision making, a listing of the relevant costs ______.

Will help the decision maker concentrate on the pertinent data