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