State whether the following statements are true. Give reasons: Safety stock increases as demand In ABC analysis high cost items are most likely to fall in category A, and least cost items are likely to fall in category

State whether the following statements are true. Give reasons: Safety stock increases as demand In ABC analysis high cost items are most likely to fall in category A, and least cost items are likely to fall in category

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 1DQ: Define price elasticity of demand. Give an example of a product with relatively elastic demand and...

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In cost accounting stocks are valued at cost or market value whichever less is. Select one: O True False
State whether the following statements are true. Give reasons: (1) Safety stock increases as demand increases. (i) In ABC analysis high cost items are most likely to fall in category A, and least cost items are likely to fall in category C. (ii) To protect against stock outs, a large batch size is a must.
Which of the following performance measures will increase if inventory decreases and all else remains the same? Return on Investment Residual Income A) Yes Yes B) No Yes C) Yes No D) No No Multiple Choice Choice A Choice B Choice C Choice D
The underlying assumptions of technical analysis are that A.price move in predictable patterns B. Market value is determined by market news C. Investors are rational
When is the stock value high in absorption costing than marginal costing? a. None of the options b. absorption costing is less than marginal costing c. marginal costing is more than absorption costing d. absorption costing is more than marginal costing
Which of the following can be considered a risk in CVP analysis? a. Sales mix b. Break-even point c. Margin of safety d. Contribution margin
“An improvement in earnings growth can be achieved at the expense of market share (i.e., an unfavorable market share variance).” Do you agree and why or why not?
What does beta represent? Multiple Choice Beta is a measure of covariance standardized by the variance of the market. This adjusts the risk of the firm to be relative to the risk of the market. Beta is the extra income earned on an investment that cannot be explained by systematic risk or unsystematic risk. Beta is related to the return on risk-free assets. Beta is always positive or O, it cannot be negative because stock prices cannot be negative.
a) Discuss the difference between a price-weighted index and a value-weighted index. Give one example for the price-weighted index and one example for the value-weighted index and discuss any problems/advantages associated with the specific indices. b) We assume that investors use mean-variance utility: U = E(r) – 0.5 × Ao², where E(r) is the expected return, A is the risk aversion coefficient and o? is the variance of returns. Given that the optimal proportion of the risky asset in the complete port- folio is given by the equation y* = E , where r; is the risk-free rate, E(rp) is the expected returm of the risky portfolio, o, is variance of returns, and A is the risk aversion coefficient. For each of the variables on the right side of the equation, discuss the impact of the variable's effect on y* and why the nature of the relationship makes sense intuitively. Assume the investor is risk averse. Ao
An investor takes as large a position as possible when an equilibrium price relationship is violated. This is an example of:a. A dominance argument.b. The mean-variance efficient frontier.c. Arbitrage activity.d. The capital asset pricing model.
Designated market value : Group of answer choices A)is always the middle value of replacement cost, net realizable value, and net realizable value less a normal profit margin. B)should always be equal to net realizable value. C)may sometimes exceed net realizable value. D)should always be equal to net realizable value less a normal profit margin.
Which of the following statements is true? OA. When a large proportion of income is spent on a product or service, the more elastic the supply will be. Percentage change in price OB Elasticity of supply Percentage change in quantity supplied OC. Products or services in which inputs are readily available have a more elastic supply. OD. None of the above is true. hand written otherwise skip