chapter 11 review

Hal's lost wages at burger Haven

Hal currently works as the fry guy at burger haven but is thinking of quitting his job to attend college full time next semester. Which of the following would be considered an opportunity cost of attending college

avoidable fixed costs

In a make-or-buy decision, relevant costs include:

relevant in decision making

Opportunity costs are:

false

a cost that can be avoided by choosing one alternative over another is NOT relevant for decision purposes

true

a cost that is relevant in one decision may not be relevant in another

false

an avoidable cost is a cost that can be completely eliminated irrespective of whether one choose one alternative or another in a decision

true

fixed costs may or may not be relevant in decisions about whether a product should be dropped

false

future costs that do not differ between the alternatives in a decision are aviodable costs

true

only future costs that differ between alternatives are relevant in decision making

true

the book value of a machine, as shown on the balance sheet, is not relevant in the decision concerning the replacement of that machine by another machine

false

the book value of old equipment is a relevant cost in a decision to replace that equipment (ignore taxes)

joint products

two or more products produced from a common input are called:

contribution margin per unit of the constraining resource

when a multi product factory operates at full capacity, decisions must be made about which products to emphasize. In making such decisions, products should be ranked based on: