ch. 13 manag

false

Variable costs are always relevant in decision making and are the only costs that should be considered.

true

When using a decision tree, the outcomes of each decision are shown with their costs and benefits.

false

Relevant costs and revenues are those costs and revenues that occur in the future and are the same among alternatives.

true

An analysis of outsourcing requires an analysis of quality as well as costs

true

. In accepting a special order, it is important to consider unused capacity

true

. In making special order pricing decisions, generally only unit costs and batch-costs need to be considered assuming excess capacity exists

false

A business has complete freedom when setting prices for products and services

true

Avoidable costs are often a good approximation of the relevant costs between alternatives.

false

Because facility costs are fixed and do not change with volume changes, these cost are never relevant in considering alternatives

false

Because it lacks complete objectivity, subjective information is not useful in good decision making.

false

Charging varying prices for the same product is always illegal because it is discriminatory

true

Cost management is a powerful activity including a proactive attitude

false

Costs that could be avoided if a business unit is dropped are not relevant to the decision.

true

In decision making, feedback is important because it enhances learning

false

It is important in decision making to focus only on future decisions; decisions made in the past should not be considered

true

Most not-for-profit organizations have a zero overall target profit

false

Not-for-profit organizations do not need goals and objectives

false

Price discrimination involves temporarily setting a price below cost to broaden demand for a product and injure competition

true

Some costs will continue to be incurred if the company outsources a particular function.

false

Sunk costs are relevant to decision-making

false

Tangible Objectives are abstract goals of the organization

false

Target pricing can be found at the intersection of the demand and supply curve.

false

The target price is found by multiplying the target cost times one plus the target profit percentage.

false

The target profit equals the desired return on sales times the contribution margin

true

To achieve target costing, organizations are often required to redesign their systems

false

To properly use price-led costing, a company needs to study only its cost