Question 1

An ______________________________ is the potential benefit lost by taking a specific action when two or more alternative choices are available.

Accepted Answer

The answer of An ______________________________ is the potential benefit lost...

Question 2

A _____________________ arises from a past decision and cannot be avoided or changed; it is irrelevant to future decisions.

Accepted Answer

The answer of A _____________________ arises from a past decision...

Question 3

A _______________________________ is the combination of products sold by a company.

Accepted Answer

The answer of A _______________________________ is the combination of products...

Question 4

A cost-plus method of determining a product's selling price adds a _________________________ to total product cost to reach a target price.

Accepted Answer

The answer of A cost-plus method of determining a product's...

Question 5

An ________________________ requires a future outlay of cash and is relevant for current future decision making.

Accepted Answer

The answer of An ________________________ requires a future outlay of...

Question 6

In a constrained resource situation, a company should maximize contribution margin per _______________________________.

Accepted Answer

The answer of In a constrained resource situation, a company...

Question 7

A local learning center is considering replacing the computers in its facility with thin client technology, thereby eliminating the need for individual computers at each station in the lab.The cost to purchase and install this new technology is $450,000 and it is projected to last for six years.The existing computers have a book value of $70,000 and a market value of $18,000 if they were to be sold.They expect to save a fair amount of money in maintenance costs and software upgrades if they go to the new technology.
Required:
a.What would the annual savings have to be in order to warrant the replacement of the existing computers with the thin client technology?
b.What would the annual savings have to be in order to warrant the replacement of the existing computers with the thin client technology if the existing computers have no current market value?

Accepted Answer

The answer of A local learning center is considering replacing...

Question 8

A company expects its three departments to yield the following income for next year:
 $\begin{array}{lrrr}
 & \text { Dept. O } & \text { Dept. K } & \text { Dept. W } \
\text { Sales }& \$ 92,000 & \$ 15,000 & \$ 87,000 \
\text { Expenses } \
\text { Avoidable } & 73,000 & 1,000 & 36,000 \
\text { Unavoidable } & 2,000 & 8,000 & 37,000 \
\hline \text { Total expenses } & 75,000 & 9,000 & 73,000 \
\hline  \text { Net income(loss) } & \underline {\$ 17,000} & \underline {\$ 6,000} & \underline {\$ 14,000}
\end{array}$ Required: Compute the following independent calculations:
a.The effect on total company income if Dept.O is eliminated.
b.The effect on total company income if Dept.K is eliminated.
c.The effect on total company income if Dept.W is eliminated.

Accepted Answer

The answer of A company expects its three departments to...

Question 9

A company has already incurred a $93,000 cost in partially producing its three products.Their selling prices when partially and fully processed are shown in the following table with the additional costs necessary to finish their processing.Based on this information, should any products be processed further?
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Product } & \begin{array} { c } 
\text { Unfinished } \
\text { Selling Price }
\end{array} & \begin{array} { c } 
\text { Finished } \
\text { Selling Price }
\end{array} & \begin{array} { c } 
\text { Further } \
\text { Processing } \
\text { Costs }
\end{array} \
\hline \text { A } & \$ 31.27 & \$ 62.37 & \$ 33.76 \
\hline \text { B } & 42.56 & 96.11 & 49.82 \
\hline \text { C } & 89.01 & 102.72 & 17.29 \
\hline
\end{array}$$

Accepted Answer

The answer of A company has already incurred a $93,000...

Question 10

Relevant costs are also known as ___________________.

Accepted Answer

The answer of Relevant costs are also known as ___________________....

Question 11

A company expects its three departments to yield the following income for next year:
 $\begin{array}{lrrr}
& \text { Dept. X } & \text { Dept. Y } & \text { Dept. Z } \
\text { Sales } & \$ 94,000 & \$ 15,000 & \$ 70,000 \
\text { Expenses } \
\text { Avoidable } & 71,000 & 2,000 & 52,000 \
\text { Unavoidable } & 4,000 & 7,000 & 20,000 \
\hline \text { Total expenses } & 75,000 & 9,000 & 72,000 \
\hline\text { Net income(loss) } & \underline {\$ 19,000} & \underline {\$ 6,000} &\underline { \$(2,000)}
\end{array}$ Required: Compute the following independent calculations:
a.The effect on total company income if Dept.X is eliminated.
b.The effect on total company income if Dept.Y is eliminated.
c.The effect on total company income if Dept.Z is eliminated.
d.Should any of these departments be eliminated? Why of why not?

Accepted Answer

The answer of A company expects its three departments to...

Question 12

In this chapter, you examined several short-term managerial decision tasks.Identify (list)any three of these types of decision tasks:
_________________________
_________________________
_________________________

Accepted Answer

The answer of In this chapter, you examined several short-term...

Question 13

Costs already incurred in manufacturing the units of a product that do not meet quality standards are _________________________ costs.

Accepted Answer

The answer of Costs already incurred in manufacturing the units...

Question 14

A company produces three different products that all require processing on the same machines.There are only 17,000 machine hours available in each year.Production information for each product is:
$\begin{array}{lccc}
&\underline { \mathrm { A } } & \underline { \mathrm { B } } & \underline { \mathrm { C } } \ 
\text { Sales price per unit } & \$ 22.00 & \$ 34.00 & \$ 46.00 \
\text { Variable costs per unit } & \$ 10.00 & \$ 19.00 & \$ 25.30 \
\text { Machine hours necessary to produce one unit } & .75 & 1.2 & 2.3
\end{array}$
Required:
a.Determine the preferred sales mix if there are no market constraints on any of the products.
b.Determine the preferred sales mix if the demand is limited to 7,000 units for each product.
c.Determine the preferred sales mix if the demand is limited to 8,000 units for each product.

Accepted Answer

The answer of A company produces three different products that...

Question 15

__________________________ costs are amounts the company would not incur if a segment was eliminated.

Accepted Answer

The answer of __________________________ costs are amounts the company would...

Question 16

__________________________ costs are amounts that will continue even if a segment is eliminated.

Accepted Answer

The answer of __________________________ costs are amounts that will continue...

Question 17

Match between columns
                        Premises: Management sets sales price equal to the product's total costs plus a desired markup on the product.
The combination of products sold by a company.
A desired profit amount.
Worker morale, company image, and reputation.
Amounts a company would continue to incur even if the segment in question is eliminated.
The production and nonproduction costs related to a given unit.
Amounts a company would not incur if the segment in question is eliminated.

Accepted Answer

The Answer of Total cost per unit and Markup and is...

Question 18

Match between columns
                        Premises: An additional cost incurred only if a particular action is taken.
An avoidable cost.
The incremental revenue generated by selecting a particular course of action over another.
A cost that requires a current outlay of cash.
The potential benefits of one alternative that are lost by choosing an alternative course of action.
A cost that cannot be avoided or changed in any way because it arises from a past decision; irrelevant to current and future decisions.

Accepted Answer

The Answer of Opportunity cost and Sunk cost and Relevant is...

Quiz 10: Relevant Costing for Managerial Decisions

An ______________________________ is the potential benefit lost by taking a specific action when two or more alternative choices are available.

A _____________________ arises from a past decision and cannot be avoided or changed; it is irrelevant to future decisions.

A _______________________________ is the combination of products sold by a company.

A cost-plus method of determining a product's selling price adds a _________________________ to total product cost to reach a target price.

An ________________________ requires a future outlay of cash and is relevant for current future decision making.

In a constrained resource situation, a company should maximize contribution margin per _______________________________.

Relevant costs are also known as ___________________.

In this chapter, you examined several short-term managerial decision tasks.Identify (list)any three of these types of decision tasks: _____________ _ _____________

Costs already incurred in manufacturing the units of a product that do not meet quality standards are _________________________ costs.

__________________________ costs are amounts the company would not incur if a segment was eliminated.

__________________________ costs are amounts that will continue even if a segment is eliminated.

Presented below are terms preceded by letters (a)through (g)and followed by a list of definitions 1 through 7.Match the letter of the term with the definition.Use the space provided preceding each definition.

Presented below are terms preceded by letters (a)through (f)and followed by a list of definitions 1 through 6.Match the letter of the terms with the definitions.Use the space provided preceding each definition.

Quiz 10: Relevant Costing for Managerial Decisions

An ______________________________ is the potential benefit lost by taking a specific action when two or more alternative choices are available.

A _____________________ arises from a past decision and cannot be avoided or changed; it is irrelevant to future decisions.

A _______________________________ is the combination of products sold by a company.

A cost-plus method of determining a product's selling price adds a _________________________ to total product cost to reach a target price.

An ________________________ requires a future outlay of cash and is relevant for current future decision making.

In a constrained resource situation, a company should maximize contribution margin per _______________________________.

Relevant costs are also known as ___________________.

In this chapter, you examined several short-term managerial decision tasks.Identify (list)any three of these types of decision tasks: _________________________ _________________________ _________________________

Costs already incurred in manufacturing the units of a product that do not meet quality standards are _________________________ costs.

__________________________ costs are amounts the company would not incur if a segment was eliminated.

__________________________ costs are amounts that will continue even if a segment is eliminated.

Presented below are terms preceded by letters (a)through (g)and followed by a list of definitions 1 through 7.Match the letter of the term with the definition.Use the space provided preceding each definition.

Presented below are terms preceded by letters (a)through (f)and followed by a list of definitions 1 through 6.Match the letter of the terms with the definitions.Use the space provided preceding each definition.

In this chapter, you examined several short-term managerial decision tasks.Identify (list)any three of these types of decision tasks: _____________ _ _____________