Please use an example to explain the opportunity-cost concept and why it is used in decision-making.

Q: Define opportunity costs and explain why they represent acommon source of error in making cost…

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Q: Ibra Company is considering the following alternatives: Alternative A Alternative B Revenues OMR…

A: We know that, Incremental profit = incremental sales - incremental total cost Total cost = total…

Q: Define pricing decisions.

A: Selling Price:   It refers to the price at which the product or service will be sold in the market…

Q: Decisions where relevant cost analysis might be used effective is Keep or replace decision. Explain…

A: Relevant costs are those costs that can be used while making a decision on whether to keep or…

Q: 2. A company is where the members guarantee the payment of certain (usually nominal) amounts if the…

A: An group of persons who donate money or money's worth to a common fund and use it for a purpose is…

Q: rovide another example of a cost center and explain why you choose that example.

A: Cost center is a department or function within an organization that does not directly add to profit…

Q: Define the term make-or-buy (or outsourcing) analysis?

A: Make or buy: purchasing of goods from the outside vendors is called outsourcing.

Q: Which of the following costs is relevant in decisionmaking? committed costs accounting costs cash…

A: Following is the answer to the given question

Q: What Is Prerequisites for Successful Target and Cost-Based Pricing?

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: Determining the best approach to pricing requires a cost-benefit trade-off. Explain.

A: The best approach to pricing requires the cost benefit trade-off is explained as below, The Best…

Q: Define recruiting and what are its representative cost driver?

A: Recruiting:Recruiting is the process of hiring qualified employees to make them work for the…

Q: What is an opportunity cost and why should it be included when making decisions?

A: Opportunity costs is the costs of next best alternative foregone by accepting current alternative.…

Q: Define and give examples of the following terms: cost center, revenue center, profit center, and…

A: Responsibility center: It refers to that unit of the organization for which a separate executive is…

Q: What is the relationship between contribution margin and responsibility margin? Explain how each of…

A: Contribution Margin: The contribution margin is the excess of selling price over the variable costs…

Q: Describe the potential costs and benefits of LBOs?

A: LBO is the acquisition method where the company used to use the borrowed money in order to acquire…

Q: What does the intrinsic value formula look like? Please explain the components of the formula.

A: Intrinsic value or the real value is the calculated value or anticipated value of a company’s stock…

Q: Why is the contribution margin an important concept forincremental decision making?

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Q: What is the benefit of identifying avoidable and unavoidable cost in decision making process?

A: Avoidable costs: Avoidable Costs, as the name suggests, are the costs that can be avoided of the…

Q: What does goal congruence mean? Provide an example with your explanation.

A: Goal congruence means that an individual's goals are aligned with the goals of the organization. For…

Q: Discuss the FOUR basic steps in benefit-cost analysis, which aspect of benefit-cost analysis would…

A: Cost-benefit analysis or CBA is referred to as the prices, which helps in measuring the benefits of…

Q: Define the Make-or-Buy Decision?

A: A make or buy decision is to choose whether to manufacture the produce in-house or purchase it from…

Q: Explain the impact of the cost-volume-profit connection on pricing strategy.

A: The cost volume profit analysis analyse the impact of the variable cost and fixed cost on the…

Q: Give two examples of sunk costs, and explain why they are irrelevant in decision making.

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Q: Understand how fixedand variable costs behave andhow to use them to predictcosts.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Explain what opportunity cost is. supplement the explanation with an appropriate example

A: The decision to choose one from given alternatives leads to concept of opportunity cost.