CPEN 481 FINAL QUESTIONS AND DETAILED
ANSWERS|ALREADY GRADED A
The Decision Making Process Correct Ans- 1. Recognize the problem or
opportunity
2. Define the goal or objective
3. Assemble relevant data
4. Identify feasible alternatives
5. Select the criterion for determining the best alternatives
6. Construct a model
7. Predict each alternative's outcomes or consequences
8. Choose the best alternative
9. Audit the result
Fixed Costs Correct Ans- - Costs do not change with out put
- Ex. insurance, property tax, interest, rent, wages
Variable Costs Correct Ans- - Depends on the level of output or activity
- Ex. number of apples to apple pies, doors to the cars produced, screens
to computers
Marginal Costs Correct Ans- - Costs for one more unit or one more
activity
- Ex. TC = 100$ for unit one and TC = 210 for unit 2 then MC = ??
,Average Costs Correct Ans- - Total cost divided by the number of units
Total Cost Correct Ans- = total fixed cost + total variable cost
Break-even point Correct Ans- The level of activity at which the total
cost of providing the product, good or service is equal to the revenue
Profit region Correct Ans- Values of the variable x greater than the
break-even point, where total revenue is greater than total costs
Loss region Correct Ans- Values of the variable x less than the break-
even point, where total cost is greater than total revenue
Sunk Cost Correct Ans- - Money already spent due to a past decision
- Should be disregarded in engineering economic analysis
- Nothing can be done at this point to change the cost
Opportunity Cost Correct Ans- - The costs associated with a resource
being used for an alternate task
- Sometimes referred to as "forgone opportunity costs"
Recurring Cost Correct Ans- - A cost that reoccurs at regular intervals
Non-recurring Cost Correct Ans- - One of a kind cost recurring at
irregular intervals
, Incremental Cost Correct Ans- - Cost differences between alternatives
Cash Cost Correct Ans- - Requires a cash transaction(cash flow)
Book (Non-cash) costs Correct Ans- - Recorded but are not transactions
- Do not represent cash flows, thus are not included in engineering
economic analysis
Life-Cycle Costs Correct Ans- - Considers costs over the entire life-
cycle
Financial Accounting Correct Ans- - concerned with recording and
analyzing the financial data of a business
- Provide information to both internal management and external parties
who wish to make decisions about an enterprise
- Required by law
- Communicate with stakeholders
Managerial Accounting Correct Ans- - Concerned with estimating and
monitoring costs and benefits of the various activities of an enterprise
Financial Management Correct Ans- - Plan future transactions & aid for
better decision making
- Manage the finances and economic resources of the organization
ANSWERS|ALREADY GRADED A
The Decision Making Process Correct Ans- 1. Recognize the problem or
opportunity
2. Define the goal or objective
3. Assemble relevant data
4. Identify feasible alternatives
5. Select the criterion for determining the best alternatives
6. Construct a model
7. Predict each alternative's outcomes or consequences
8. Choose the best alternative
9. Audit the result
Fixed Costs Correct Ans- - Costs do not change with out put
- Ex. insurance, property tax, interest, rent, wages
Variable Costs Correct Ans- - Depends on the level of output or activity
- Ex. number of apples to apple pies, doors to the cars produced, screens
to computers
Marginal Costs Correct Ans- - Costs for one more unit or one more
activity
- Ex. TC = 100$ for unit one and TC = 210 for unit 2 then MC = ??
,Average Costs Correct Ans- - Total cost divided by the number of units
Total Cost Correct Ans- = total fixed cost + total variable cost
Break-even point Correct Ans- The level of activity at which the total
cost of providing the product, good or service is equal to the revenue
Profit region Correct Ans- Values of the variable x greater than the
break-even point, where total revenue is greater than total costs
Loss region Correct Ans- Values of the variable x less than the break-
even point, where total cost is greater than total revenue
Sunk Cost Correct Ans- - Money already spent due to a past decision
- Should be disregarded in engineering economic analysis
- Nothing can be done at this point to change the cost
Opportunity Cost Correct Ans- - The costs associated with a resource
being used for an alternate task
- Sometimes referred to as "forgone opportunity costs"
Recurring Cost Correct Ans- - A cost that reoccurs at regular intervals
Non-recurring Cost Correct Ans- - One of a kind cost recurring at
irregular intervals
, Incremental Cost Correct Ans- - Cost differences between alternatives
Cash Cost Correct Ans- - Requires a cash transaction(cash flow)
Book (Non-cash) costs Correct Ans- - Recorded but are not transactions
- Do not represent cash flows, thus are not included in engineering
economic analysis
Life-Cycle Costs Correct Ans- - Considers costs over the entire life-
cycle
Financial Accounting Correct Ans- - concerned with recording and
analyzing the financial data of a business
- Provide information to both internal management and external parties
who wish to make decisions about an enterprise
- Required by law
- Communicate with stakeholders
Managerial Accounting Correct Ans- - Concerned with estimating and
monitoring costs and benefits of the various activities of an enterprise
Financial Management Correct Ans- - Plan future transactions & aid for
better decision making
- Manage the finances and economic resources of the organization
