Exam 4 questions with answers.
_____ are the costs associated with not choosing the other alternative ANS -opportunity costs
Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future
events) and should be excluded in decision-making? ANS -avoidable costs
The managerial decision-making process has which of the following as its third step? ANS -perform a
comprehensive differential analysis of potential solutions
WOTF is sometimes referred to as the "Anti Chain Store Act"? ANS -Robinson-Patman Act
_____ is the act of using another company to provide goods or services that your company requires ANS
-outsourcing
WOTF is a disadvantage of outsourcing? ANS -limiting ability to upsize or downsize production
WOTF is not a qualitative decision that should be considered in an outsourcing decision? ANS -relevant
costs
WOTF is one of the two approaches used to analyze data in the decision to keep or discontinue a
segment? ANS -comparing contribution margins and fixed costs
When should a segment be dropped? ANS -only when the decrease in total contribution margin is less
than the decrease in fixed cost
When operating in a constrained environment, which products should be produced? ANS -products
with the highest contribution margin per unit of the constrained process
Capital investment decisions often involve all of the following expect ANS -short periods of time
_____ are the costs associated with not choosing the other alternative ANS -opportunity costs
Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future
events) and should be excluded in decision-making? ANS -avoidable costs
The managerial decision-making process has which of the following as its third step? ANS -perform a
comprehensive differential analysis of potential solutions
WOTF is sometimes referred to as the "Anti Chain Store Act"? ANS -Robinson-Patman Act
_____ is the act of using another company to provide goods or services that your company requires ANS
-outsourcing
WOTF is a disadvantage of outsourcing? ANS -limiting ability to upsize or downsize production
WOTF is not a qualitative decision that should be considered in an outsourcing decision? ANS -relevant
costs
WOTF is one of the two approaches used to analyze data in the decision to keep or discontinue a
segment? ANS -comparing contribution margins and fixed costs
When should a segment be dropped? ANS -only when the decrease in total contribution margin is less
than the decrease in fixed cost
When operating in a constrained environment, which products should be produced? ANS -products
with the highest contribution margin per unit of the constrained process
Capital investment decisions often involve all of the following expect ANS -short periods of time
