Question 1

In a make or buy decision,the reliability of a potential supplier is

Accepted Answer

A) an irrelevant decision factor. 
B) relevant information if it can be quantified. 
C) an opportunity cost of continued production. 
D) a qualitative decision factor. 
A) an irrelevant decision factor. 
B) relevant information if it can be quantified. 
C) an opportunity cost of continued production. 
D) a qualitative decision factor.

Question 2

A cost is sunk if it

Accepted Answer

A) is not an incremental cost. 
B) is unavoidable. 
C) has already been incurred. 
D) is irrelevant to the decision at hanD. 
A) is not an incremental cost. 
B) is unavoidable. 
C) has already been incurred. 
D) is irrelevant to the decision at hanD.

Question 3

The relative product quantities composing a company's total sales is referred to as a company's __________.

Accepted Answer

The answer of The relative product quantities composing a company's...

Question 4

Savannah Motors
Savannah Motors is trying to decide whether it should keep its existing car washing machine or purchase a new one that has technological advantages (which translate into cost savings)over the existing machine.Information on each machine follows:
                                                                       $\text {\underline{ Old machine} }$ &nbsp$\text {\underline{ New machine} }$
$\begin{array}{lll}
\text { Original cost } & \$ 9,000 && \$ 20,000 \
\text { Accumulated depreciation } & 5,000 && 0 \
\text { Annual cash operating costs } & 9,000& & 4,000 \
\text { Current salvage value of old machine } & 2,000 & \
\text { Salvage value in } 10 \text { years } & 500 && 1,000  \
\text { Remaininglife } & 10 \text { yrs } &&10 yrs
\end{array}$

Refer to Savannah Motors.The $4,000 of annual operating costs that are common to both the old and the new machine are an example of a(n)

Accepted Answer

A) sunk cost. 
B) irrelevant cost. 
C) future avoidable cost. 
D) opportunity cost. 
A) sunk cost. 
B) irrelevant cost. 
C) future avoidable cost. 
D) opportunity cost.

Question 5

When a company discontinues a segment,total corporate costs may decrease in all of the following categories except

Accepted Answer

A) variable production costs. 
B) allocated common costs. 
C) direct fixed costs. 
D) variable period costs. 
A) variable production costs. 
B) allocated common costs. 
C) direct fixed costs. 
D) variable period costs.

Question 6

If a cost is irrelevant to a decision,the cost could not be

Accepted Answer

A) a sunk cost. 
B) a future cost. 
C) a variable cost. 
D) an incremental cost. 
A) a sunk cost. 
B) a future cost. 
C) a variable cost. 
D) an incremental cost.

Question 7

When making a decision to discontinue an operating segment,avoidable fixed costs are not considered.

Accepted Answer

A) True 
 B)False

Question 8

In setting compensation structures,fixed salary expense is normally not considered.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following costs would be relevant in short-term decision making?

Accepted Answer

A) incremental fixed costs 
B) all costs of inventory 
C) total variable costs that are the same in the considered alternatives 
D) the cost of a fixed asset that could be used in all the considered alternatives 
A) incremental fixed costs 
B) all costs of inventory 
C) total variable costs that are the same in the considered alternatives 
D) the cost of a fixed asset that could be used in all the considered alternatives

Question 10

In evaluating the profitability of a specific organizational segment,all ____ would be ignored.

Accepted Answer

A) segment variable costs 
B) segment fixed costs 
C) costs allocated to the segment 
D) period costs 
A) segment variable costs 
B) segment fixed costs 
C) costs allocated to the segment 
D) period costs

Question 11

Boston Bakers
Boston Bakers is trying to decide whether it should keep its existing bread-making machine or purchase a new one that has technological advantages (which translate into cost savings)over the existing machine.Information on each machine follows:
                                                                       $\text {\underline{ Old machine} }$ &nbsp$\text {\underline{ New machine} }$
$\begin{array}{lll}
\text { Original cost } & \$ 10,000 && \$ 25,000 \
\text { Accumulated depreciation } & 6,000 && 0 \
\text { Annual cash operating costs } & 9,500& & 5,000 \
\text { Current salvage value of old machine } & 2,500 & \
\text { Salvage value in } 10 \text { years } & 650 && 1,200  \
\text { Remaininglife } & 12\text { yrs } &&12 yrs
\end{array}$

Refer to Boston Bakers.The estimated $650 salvage value of the existing machine in 10 years represents a(n)

Accepted Answer

A) sunk cost. 
B) opportunity cost of selling the existing machine now. 
C) opportunity cost of keeping the existing machine for 10 years. 
D) opportunity cost of keeping the existing machine and buying the new machine. 
A) sunk cost. 
B) opportunity cost of selling the existing machine now. 
C) opportunity cost of keeping the existing machine for 10 years. 
D) opportunity cost of keeping the existing machine and buying the new machine.

Question 12

Which of the following is not a characteristic of relevant costing information? It is

Accepted Answer

A) associated with the decision under consideration. 
B) significant to the decision maker. 
C) readily determined from financial records. 
D) related to a future endeavor. 
A) associated with the decision under consideration. 
B) significant to the decision maker. 
C) readily determined from financial records. 
D) related to a future endeavor.

Question 13

Most ____ are relevant to decisions to acquire capacity,but not to short-run decisions involving the use of that capacity.

Accepted Answer

A) sunk costs 
B) incremental costs 
C) fixed costs 
D) prime costs 
A) sunk costs 
B) incremental costs 
C) fixed costs 
D) prime costs

In a make or buy decision,the reliability of a potential supplier is

A cost is sunk if it

The relative product quantities composing a company's total sales is referred to as a company's __________.

When a company discontinues a segment,total corporate costs may decrease in all of the following categories except

If a cost is irrelevant to a decision,the cost could not be

When making a decision to discontinue an operating segment,avoidable fixed costs are not considered.

In setting compensation structures,fixed salary expense is normally not considered.

Which of the following costs would be relevant in short-term decision making?

In evaluating the profitability of a specific organizational segment,all ____ would be ignored.

Which of the following is not a characteristic of relevant costing information? It is

Most ____ are relevant to decisions to acquire capacity,but not to short-run decisions involving the use of that capacity.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 10: Relevant Information for Decision Making

In a make or buy decision,the reliability of a potential supplier is

A cost is sunk if it

The relative product quantities composing a company's total sales is referred to as a company's __________.

When a company discontinues a segment,total corporate costs may decrease in all of the following categories except

If a cost is irrelevant to a decision,the cost could not be

When making a decision to discontinue an operating segment,avoidable fixed costs are not considered.

In setting compensation structures,fixed salary expense is normally not considered.

Which of the following costs would be relevant in short-term decision making?

In evaluating the profitability of a specific organizational segment,all ____ would be ignored.

Which of the following is not a characteristic of relevant costing information? It is

Most ____ are relevant to decisions to acquire capacity,but not to short-run decisions involving the use of that capacity.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters