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- Why are there objections to using absorption costing when segment reports of profitability are being prepared?Which of the following is one of the two approaches used to analyze data in the decision to keep or discontinue a segment? A. comparing contribution margins and fixed costs B. comparing contribution margins and variable costs C. comparing gross margin and variable costs D. comparing total contribution margin under each alternativeIn a decision analysis situation, which one of the following costs is generally not relevant to the decision?A. Differential cost.B. Avoidable cost.C. Incremental cost.D. Historical cost.
- Costs that will differ between alternatives and influence the outcome of a decision ar Select one: O a. Relevant costs. O b. Sunk costs. O c. Product costs. O d. Period costs. e. None of the answers are correct1. Why are indirect costs not directly traced to cost objects in the same way as direct costs? 2. Define cost tracing, cost allocation, allocation base and cost driver. 3. Distinguish between arbitrary and cause-and-effect allocations. 4. Explain how cost information differs for profit measurement/inventory valuation requirements compared with decision-making requirements. 5. Explain why cost systems should differ in terms of their level of sophistication.Which of the following costs can be ignored when making a decision?a. Opportunity costs. b. Differential costs. c. Sunk costs. d. Relevant costs.
- a.Variable costs in the context of cost-volume-profit (CPV) analysis? b. Fixed costs in the context of CPV analysis? c. Contribution margin in the context of CPV analysis?Which of the following statement is correct for relevant costs? a.It is avoidable, future and measured by cash b.It is avoidable, future and measured by profit c.It is unavoidable, future and measured by cash d.It is unavoidable, future and measured by profitWhen pricing products and using cost-plus pricing, which type of cost is perceived to be the safest one to use to establish the price. OA. Manufacturing cost B. Full absorption cost OC. Prime cost OD. Variable costs
- Which method results in a more realistic amount for income because it matches the most current costs against revenue? a.FIFO b.Weighted average cost c.Specific identification d.LIFOWhich 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? Group of answer choices A. avoidable costs B. unavoidable costs C. sunk costs D. differential costsWhen making decisions, managers should consider a. revenues that differ between alternatives. b. costs that do not differ between alternatives. c. only variable costs. d. sunk costs in their decisions.
