chp 4 acc SB

anything that prevents you from getting more of what you want is a(n) _____________

constraint

A cost that can be eliminated in whole or in part by choosing one alternative over another is a(n) Blank______ cost. Multiple choice question. irrelevant avoidable sunk incremental

avoidable

A set of activities ranging from development to production to after-sales service is called Blank______. Multiple choice question. vertical integration a marketing strategy the value chain

value chain

When making a decision whether to keep an existing piece of equipment or replace it, which of the following is (are) considered a sunk cost? Multiple choice question. Neither the original purchase price or annual depreciation expense. Only the original purchase price. Only the annual depreciation expense. Both the original purchase price and annual depreciation expense.

Both the original purchase price and annual depreciation expense.

Synonyms for differential costs include Blank______ cost. Multiple select question. irrelevant sunk avoidable incremental

avoidable incremental

The first step in decision making is to Blank______. Multiple choice question. perform a differential analysis identify relevant costs and benefits define the alternatives

define the alternatives

A future cost that is not the same between any two alternatives is known as a(n) ________________________________ , incremental, or avoidable cost

differential

Focusing on future costs and benefits that are not the same between the choices is Blank______. Multiple choice question. defining the alternatives differential analysis the total cost approach irrelevant cost analysis

differential analysis

The key to effective decision making is Blank______. Multiple choice question. knowing there are at least two alternatives differential analysis considering opportunity costs

differential analysis

When a company is involved in more than one activity in the entire value chain, it is horizontally integrated. True false question. True False

false

A business segment should only be dropped if a company can save more in Blank______ costs than it loses in contribution margin

fixed

When making a volume-trade off decision, managers should ignore Blank______. Multiple choice question. fixed costs contribution margin variable costs

fixed cost

To maximize total contribution margin when a constrained resource exists, produce the products with the Blank______. Multiple choice question. lowest contribution margin per unit of the constrained resource lowest unit contribution margin highest unit contribution margin highest contribution margin per unit of the constrained resource

highest contribution margin per unit of the constrained resource

When making a decision to either buy a movie ticket or rent a DVD, the cost of the movie ticket is an example of a(n) Blank______ cost. Multiple select question. incremental irrelevant avoidable sunk

incremental avoidable

Costs and benefits that should be ignored when making decisions are called Blank______ costs and benefits. Multiple choice question. differential relevant incremental irrelevant opportunity

irrelevant

When deciding whether to fly or take the train on a trip, the cost of putting your pet in a boarding facility while you are away is a(n) Blank______ cost. Multiple choice question. relevant irrelevant sunk

irrelevant

In order to prevent confusion and keep attention focused on critical information, it is desirable to Blank______. Multiple choice question. ignore relevant costs and focus on irrelevant one isolate relevant costs from irrelevant costs combine relevant and irrelevant costs to obtain a total cost

isolate relevant costs from irrelevant costs

Differential costs and benefits that should be considered in a decision Blank______. Multiple choice question. are always qualitative may be qualitative or quantitative are always quantitative

may be qualitative or quantitative

The potential benefit given up when selecting one alternative over another is a(n) Blank______ cost. Multiple choice question. avoidable sunk opportunity irrelevant

opportunity

Differential revenue is an example of a(n) Blank______ benefit. Multiple choice question. irrelevant avoidable sunk relevant

relevant

When making a decision only Blank______ costs and benefits should to be included in the analysis. Multiple choice question. relevant unavoidable irrelevant opportunity

relevant

When making a decision, qualitative differences between alternatives Blank______ be ignored. Multiple choice question. should may or may not should not

should not

Determining whether to carry out an activity in the value chain internally or use a supplier is a Blank______ decision. Multiple choice question. utilization of a constrained resource sourcing special order product line

sourcing

A one-time sale that is not considered part of the company's normal ongoing business is referred to as a(n)______________________________ decision

special order

What type of cost is never relevant and should be disregarded when making decisions? Multiple choice question. Marginal Incremental Sunk Opportunity

sunk

When making a decision, only relevant items are included in the analysis of the alternatives when using Blank______. Multiple choice question. neither the differential nor total cost approach the total cost approach only both the differential and total cost approaches the differential cost approach only

the differential cost approach only

If a company is using a resource that could be used for some other purpose, the opportunity cost of that resource is Blank______. Multiple choice question. the profit from the best alternative use of the resource the profit from the current use of the resource zero

the profit from the best alternative use of the resource

When making a decision, irrelevant items are included in the analysis of both alternatives when using Blank______. Multiple choice question. neither the differential nor total cost approach the total cost approach only both the differential and total cost approaches the differential cost approach only

the total cost approach only

when considering decision alternatives, both relevant and irrelevant costs are included when using the _______________________ cost approach.

total

Every decision has at least Blank______ alternative(s). Multiple choice question. two three one

two

Activities ranging from development to production to after-sales service are called a(n) _______________________________________

value chain

A special order should be accepted Blank______. Multiple choice question. when the incremental revenue from the special order exceeds the incremental costs of the order almost always, because it means more business and will keep the employees productive when the incremental costs from the special order exceeds the incremental revenue of the order

when the incremental revenue from the special order exceeds the incremental costs of the order

When a resource, such as space in the factory, has no alternative use, its opportunity cost is Blank______. Multiple choice question. infinite negative not determinable zero

zero

Which term refers to a company that is involved in more than one activity in the value chain? Multiple choice question. Horizontal integration Integrated value chain Non-integrated value chain Vertical integration

vertical integration

When demand for products exceeds the production capacity, a Blank______ decision must be made. Multiple choice question. sell or process volume trade-off sourcing product line

volume trade off

Opportunity costs are not found in accounting records because they are not relevant to decisions. True false question.TrueFalse

false

When deciding whether to drive your car or take a train to a destination, the costs for your car insurance and driver's license are Blank______ costs. Multiple choice question. irrelevant avoidable relevant

Irrelevant

Which of the following should not be included in the analysis when making a decision? Multiple select question. Opportunity costs Sunk costs Non-differential future costs Avoidable costs

Sunk costs Non-differential future costs

A business segment should only be dropped if a company can avoid more in fixed costs than it gives up in Blank______. Multiple choice question. variable costs net operating income contribution margin segment sales

contribution margin

Isolating relevant costs is desirable because Blank______. Multiple select question. critical information may be overlooked with the total cost approach managers prefer to see all costs and benefits associated with a decision irrelevant costs may be used incorrectly in the analysis all information needed for the total cost approach is rarely available

critical information may be overlooked with the total cost approach irrelevant costs may be used incorrectly in the analysis all information needed for the total cost approach is rarely available

A company must make a volume trade-off decision when they Blank______. Multiple select question. have excess capacity that is not currently being utilized do not have enough capacity to satisfy the demand for all of its products must trade off units of one product for units of another due to limited production capacity

do not have enough capacity to satisfy the demand for all of its products must trade off units of one product for units of another due to limited production capacity

tephens, Inc. is considering dropping a product line. During the prior year, the line had sales of $170,000, variable costs of $86,000 and total fixed expenses of $110,000. Of the fixed expenses, $95,000 are avoidable. If Stephens drops the product line, net operating income will Blank______. Multiple choice question. increase by $11,000 increase by $9,000 decrease by $60,000 increase by $26,000

inc by 11,000

Whether to perform various organization activities such as payroll and accounting internally or use an external provider is a Blank______ decision. Multiple choice question. special order product line sell or process sourcing

sourcing

When considering accepting a special order, Blank______. Multiple select question. incremental revenue should equal increment cost there must be idle capacity opportunity costs should never be considered normal sales must not be affected

there must be idle capacity normal sales must not be affected

When a constraint exists, companies need to focus on maximizing Blank______. Multiple choice question. total contribution margin net sales net income from sales

total contribution margin

A company is considering buying a component part that they currently make. Items related to the equipment being used to make the component that are relevant to this decision include Blank______. Multiple select question. alternative uses for the equipment original cost salvage value annual depreciation charges

alternative uses for the equipment salvage value