Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions. What should be done while making short term business decisions.

Question

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Answer 1

Question

Chapter 25, Problem 1QC

To determine

Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.

Expert Solution & Answer

Answer to Problem 1QC

Separate the variable from the fixed costs

Explanation for correct answer:

By separating the variable from the fixed cost i.e. contribution margin approach concept, a manager can ascertain and take short term managerial decisions in an efficient manner. Thus, this approach is appropriate.

Explanation of Solution

Explanation for incorrect answer:

For taking short term business decision, traditional costing approach is not apt, since it does not include many aspects of the business. Thus, it should be ignored.

Just ascertaining the total cost will not help the manager to take the apt short-term managerial decisions as there are many aspects other than cost such as labor, production etc. thus this total cost principle is ignored.

While taking a short-term business decision, a manager should consider both quantitative and qualitative factors because considering only the quantitative factors will not help in successful decision making. Thus, this approach is ignored.

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Financing Deficit Stevens Textile Corporation's 2019 financial statements are shown below: Just need the correct LOC? Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0 Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600 Total current liabilities $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings 12,860 Total assets $29,160 Total liabilities and equity $29,160 Income Statement for December 31, 2019 (Thousands of Dollars) Sales $36,000 Operating costs 34,000 Earnings before interest and taxes $ 2,000 Interest 160 Pre-tax earnings $ 1,840 Taxes (25%) 460 Net income $ 1,380 Dividends (40%) $ 552 Addition to retained earnings $ 828 Stevens grew rapidly in 2019 and financed the growth with notes payable and long-term bonds. Stevens expects sales to…

Answer 2

Question

Chapter 25, Problem 1QC

To determine

Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.

Expert Solution & Answer

Answer to Problem 1QC

Separate the variable from the fixed costs

Explanation for correct answer:

By separating the variable from the fixed cost i.e. contribution margin approach concept, a manager can ascertain and take short term managerial decisions in an efficient manner. Thus, this approach is appropriate.

Explanation of Solution

Explanation for incorrect answer:

For taking short term business decision, traditional costing approach is not apt, since it does not include many aspects of the business. Thus, it should be ignored.

Just ascertaining the total cost will not help the manager to take the apt short-term managerial decisions as there are many aspects other than cost such as labor, production etc. thus this total cost principle is ignored.

While taking a short-term business decision, a manager should consider both quantitative and qualitative factors because considering only the quantitative factors will not help in successful decision making. Thus, this approach is ignored.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 25, Problem 1QC

To determine

Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.

Expert Solution & Answer

Answer to Problem 1QC

Separate the variable from the fixed costs

Explanation for correct answer:

By separating the variable from the fixed cost i.e. contribution margin approach concept, a manager can ascertain and take short term managerial decisions in an efficient manner. Thus, this approach is appropriate.

Explanation of Solution

Explanation for incorrect answer:

For taking short term business decision, traditional costing approach is not apt, since it does not include many aspects of the business. Thus, it should be ignored.

Just ascertaining the total cost will not help the manager to take the apt short-term managerial decisions as there are many aspects other than cost such as labor, production etc. thus this total cost principle is ignored.

While taking a short-term business decision, a manager should consider both quantitative and qualitative factors because considering only the quantitative factors will not help in successful decision making. Thus, this approach is ignored.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 25, Problem 1QC

To determine

Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.

Expert Solution & Answer

Answer to Problem 1QC

Separate the variable from the fixed costs

Explanation for correct answer:

By separating the variable from the fixed cost i.e. contribution margin approach concept, a manager can ascertain and take short term managerial decisions in an efficient manner. Thus, this approach is appropriate.

Explanation of Solution

Explanation for incorrect answer:

For taking short term business decision, traditional costing approach is not apt, since it does not include many aspects of the business. Thus, it should be ignored.

Just ascertaining the total cost will not help the manager to take the apt short-term managerial decisions as there are many aspects other than cost such as labor, production etc. thus this total cost principle is ignored.

While taking a short-term business decision, a manager should consider both quantitative and qualitative factors because considering only the quantitative factors will not help in successful decision making. Thus, this approach is ignored.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 25, Problem 1QC

To determine

Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.

Expert Solution & Answer

Answer to Problem 1QC

Separate the variable from the fixed costs

Explanation for correct answer:

By separating the variable from the fixed cost i.e. contribution margin approach concept, a manager can ascertain and take short term managerial decisions in an efficient manner. Thus, this approach is appropriate.

Explanation of Solution

Explanation for incorrect answer:

For taking short term business decision, traditional costing approach is not apt, since it does not include many aspects of the business. Thus, it should be ignored.

Just ascertaining the total cost will not help the manager to take the apt short-term managerial decisions as there are many aspects other than cost such as labor, production etc. thus this total cost principle is ignored.

While taking a short-term business decision, a manager should consider both quantitative and qualitative factors because considering only the quantitative factors will not help in successful decision making. Thus, this approach is ignored.

Answer 6

Chapter 25, Problem 1QC

To determine

Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.

Expert Solution & Answer

Answer to Problem 1QC

Separate the variable from the fixed costs

Explanation for correct answer:

By separating the variable from the fixed cost i.e. contribution margin approach concept, a manager can ascertain and take short term managerial decisions in an efficient manner. Thus, this approach is appropriate.

Explanation of Solution

Explanation for incorrect answer:

For taking short term business decision, traditional costing approach is not apt, since it does not include many aspects of the business. Thus, it should be ignored.

Just ascertaining the total cost will not help the manager to take the apt short-term managerial decisions as there are many aspects other than cost such as labor, production etc. thus this total cost principle is ignored.

While taking a short-term business decision, a manager should consider both quantitative and qualitative factors because considering only the quantitative factors will not help in successful decision making. Thus, this approach is ignored.

Answer 7

Chapter 25, Problem 1QC

To determine

Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.

Answer 8

Expert Solution & Answer

Answer to Problem 1QC

Separate the variable from the fixed costs

Explanation for correct answer:

By separating the variable from the fixed cost i.e. contribution margin approach concept, a manager can ascertain and take short term managerial decisions in an efficient manner. Thus, this approach is appropriate.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Explanation for incorrect answer:

For taking short term business decision, traditional costing approach is not apt, since it does not include many aspects of the business. Thus, it should be ignored.

Just ascertaining the total cost will not help the manager to take the apt short-term managerial decisions as there are many aspects other than cost such as labor, production etc. thus this total cost principle is ignored.

While taking a short-term business decision, a manager should consider both quantitative and qualitative factors because considering only the quantitative factors will not help in successful decision making. Thus, this approach is ignored.

Answer 12

Ch. 25 - Prob. 1QC Ch. 25 - Prob. 2QC Ch. 25 - Which of the following costs are irrelevant to...Ch. 25 - Prob. 4QC Ch. 25 - Prob. 5QC Ch. 25 - 6. When companies are price-setters, their...Ch. 25 - Prob. 7QC Ch. 25 - Prob. 8QC Ch. 25 - Prob. 9QC Ch. 25 - Prob. 10QC

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions. What should be done while making short term business decisions.

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Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.

Answer to Problem 1QC

Explanation of Solution

Want to see more full solutions like this?

Chapter 25 Solutions

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions. What should be done while making short term business decisions.

Videos

Concept Introduction: Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions. What should be done while making short term business decisions.

Answer to Problem 1QC

Explanation of Solution

Want to see more full solutions like this?

Chapter 25 Solutions

Concept Introduction:

Business decisions are a vital part of managerial accounting as they are the key to improving the performance of the business. Hence, managers take utmost care while formulating and implementing these decisions.

What should be done while making short term business decisions.