Fundamentals of Cost Accounting
6th Edition
ISBN: 9781260708783
Author: LANEN, William
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 14, Problem 18CADQ
To determine
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What concept relates to the proportionate savings in costs gained when levels
of production are increased:
A) Accounting profit.
B) Economies of scale.
C) Marginal costs.
D) Barriers to entry.
E) Economic profit.
The benefit lost when choosing one option precludes receiving the benefits
from an alternative option was referred to as:
A) Irrelevant costs.
B) Lost costs.
C) Alternative costs.
D) Opportunity costs.
E) Sunk costs.
Why opportunity cost is measured and relate with the evaluation of alternative, can it be an opportunity loss?
In computing ROI, land held for future use
is considered a nonoperating asset.
is included in the calculation of operating assets.
will hurt the performance measurement of an investment center's manager.
is important in evaluating the performance of a profit center manager.
Chapter 14 Solutions
Fundamentals of Cost Accounting
Ch. 14 - What are the advantages of divisional income as a...Ch. 14 - How is divisional income like income computed for...Ch. 14 - How is return on investment (ROI) computed?Ch. 14 - What are the advantages of using an ROI-type...Ch. 14 - How can ratios, such as ROI, be used for control...Ch. 14 - How does residual income differ from ROI?Ch. 14 - How does EVA differ from residual income?Ch. 14 - What impact does the use of gross book value or...Ch. 14 - What are the dangers of using only business unit...Ch. 14 - A company prepares the master budget by taking...
Ch. 14 - Prob. 11CADQCh. 14 - What problems might there be if the same methods...Ch. 14 - Prob. 13CADQCh. 14 - The chapter identified some problems with ROI-type...Ch. 14 - Failure to invest in projects is not a problem...Ch. 14 - How would you respond to the following comment?...Ch. 14 - Prob. 17CADQCh. 14 - Prob. 18CADQCh. 14 - Prob. 19CADQCh. 14 - Prob. 20CADQCh. 14 - Prob. 21CADQCh. 14 - Compute Divisional Income Arlington Clothing,...Ch. 14 - Compute Divisional Income Refer to Exercise 14-22....Ch. 14 - Computing Divisional Income: Incomplete...Ch. 14 - Compute RI and ROI The Campus Division of...Ch. 14 - Prob. 26ECh. 14 - Compare Alternative Measures of Division...Ch. 14 - Comparing Business Units Using ROI Back Mountain...Ch. 14 - Comparing Business Units Using Residual Income...Ch. 14 - Prob. 30ECh. 14 - Universal Electronics, Inc. (UEI), which started...Ch. 14 - Comparing Business Units Using Residual...Ch. 14 - Comparing Business Units Using Economic Value...Ch. 14 - Impact of New Asset on Performance Measures The...Ch. 14 - Refer to the data in Exercise 14–34. The division...Ch. 14 - Refer to the information in Exercises 14–34 and...Ch. 14 - Impact of an Asset Disposal on Performance...Ch. 14 - Impact of an Asset Disposal on Performance...Ch. 14 - Compare Historical Cost, Net Book Value to Gross...Ch. 14 - Prob. 40ECh. 14 - Prob. 41ECh. 14 - Effects of Current Cost on Performance...Ch. 14 - Comparing Business Units Using Divisional Income,...Ch. 14 - Comparing Business Units Using Economic Value...Ch. 14 - Prob. 45PCh. 14 - Equipment Replacement and Performance Measures...Ch. 14 - Prob. 47PCh. 14 - Prob. 48PCh. 14 - Prob. 49PCh. 14 - Prob. 50PCh. 14 - Prob. 51PCh. 14 - Evaluate Performance Evaluation System: Behavioral...Ch. 14 - ROI, EVA, and Different Asset Bases Hys is a...Ch. 14 - Economic Value Added Bisbee Health Products...Ch. 14 - Prob. 55PCh. 14 - Prob. 56PCh. 14 - Refer to the information in Exercise 14-39. Assume...Ch. 14 - Refer to the information in Exercise 14-42. Assume...
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- It is sometimes said that land represents “residual” value. This statement reflects the fact that improvement costs do not vary materially from one location to another whereas rents vary considerably. Hence, land values reflect changes in rents (both up and down) from location to location. Do you agree or disagree?arrow_forwardWhen 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.arrow_forwardThe decision of whether to process products beyond the splitoff process should be based on which of the following? Select one: a. Production cost analysis b. Revenue analysis c. Incremental operating income attainable beyond the splitoff point d. Relevant cost analysis e. Gross margin analysisarrow_forward
- A company is considering replacing one of its old assets with a new one. The original purchase price of the old asset represents – Group of answer choices Relevant cost Differential cost Sunk cost Opportunity costarrow_forwardWhy are there objections to using absorption costing when segment reports of profitability are being prepared?arrow_forwardWhich 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 alternativearrow_forward
- please i just need a multiple choice answer Opportunity cost can best be defined as the a. value of the best alternative foregone when the alternative at hand is chosen. b. cost of the resources used to produce a good or service. c. money cost of a good or service. d. money cost plus interest on money borrowed to buy a good or service.arrow_forwardWhat methods are used to conduct a new system's cost-benefit analysis?i. Net prevent value;ii. Return on investment;iii. Breakeven analysis;iv. User feedback and recommendations a. All are correct b. i, ii and iii c. i, ii and iv d. ii, iii and iv.arrow_forwardThe focus of a sell or process further decision is Select one: a. incremental cost. b. incremental revenue. c. neither incremental revenue nor incremental cost. d. both incremental revenue and incremental costs.arrow_forward
- Prove that Homotheticity is required for the method of representative agent method to find the asset pricing. Otherwise, you have to use upper convultion to find the representative agent utilityarrow_forwardProfitability changes may be simply calculated by using what kind of tool: sales price/volume/variable costs/fixed costs.arrow_forwardWhat is the cost-volume-profit analysis and how can it be used for decisin making?arrow_forward
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