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When companies consider outsourcing a product, fixed costs are always irrelevant. Question 31 options: True False

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4DQ: A company accepts incremental business at a special price that exceeds the variable cost. What other...

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When companies consider outsourcing a product, fixed costs are always irrelevant.

Question 31 options:

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assi C rrat Which of the following is not a factor to consider when deciding whether to accept a special order? Select one: O A. Whether this order will hurt the brand name of the company B. Whether the offered price is sufficient to cover prime costs and fixed overhead allocated C. Whether other potential orders would be more profitable D. Whether additional fixed costs would need to be incurred E. All of the above
Which one of the following statement is not correct? O Both fixed and variable costs influence short-term decision-making. O Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action. O Opportunity costs are only considered when resources are limited. O Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs.
Which one of the following statement is not correct? Group of answer choices -Opportunity costs are only considered when resources are limited. -Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs. -Both fixed and variable costs influence short-term decision-making. -Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action.
1)What is cost behavior analysis? and Why is cost behavior analysis important to management? 2)“Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree? Agree or not agree, please describe your line of reasoning.
Which of the following best describes an "opportunity cost"? Expected future costs that differ among alternatives None of the items in this list of answers. Costs that were incurred in the past and cannot be changed The distribution of all products to be sold
Which of the following best describes an "opportunity cost"? Group of answer choices costs that were incurred in the past and cannot be changed The distribution of all products to be sold Expected future costs that differs among alternatives Benefits foregone by not choosing an alternative course of action
Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.
In a make-or-buy decision, a. the company must choose between expanding or dropping a product line. b. the company must choose between accepting or rejecting a special order. c. the company would consider the purchase price of the externally provided good to be relevant. d. the company would consider all fixed overhead to be irrelevant. e. None of these.
“A company should not allocate costs that are fixed in the short run to customers.” Do you agree? Explain briefly.
Select all that apply Differential cost is Blank ------ between two alternatives the same as opportunity cost Multiple select question, never relevant to a product decision also known as incremental cost the difference in cost
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Which of the following statements about a sunk cost is false? Question 11Answer a. It is relevant to future decisions b. It will not be impacted by any future decisions c. It cannot be changed d. It is a cost that has already been paid for