Chapter 8, Problem 8.54ACT

1.

To determine

To explain: The qualitative reasons behind discontinuance of product GS.

2.

To determine

To explain: The factors that would be relevant to a restaurant that is considering whether to make its own dinner rolls or to purchase dinner rolls from a local bakery.

3.

To determine

That how would outsourcing change a company’s cost structure.

To conclude: The change in cost structure help or harm a company’s competitive position by outsourcing.

4.

To determine

To explain: Opportunity cost and list possible opportunity costs associated with a make-or-buy decision.

5.

To determine

To explain: The undesirable result that can arise from allocating common fixed costs to product lines.

6.

To determine

The reason that could make a manager be justified in ignoring fixed costs when making a decision about a special order.

To explain: The situation when would fixed costs be relevant when making a decision about a special order

7.

To determine

The difference between segment margin and contribution margin.

To explain: The condition when segment margin and contribution margin is used.

8.

To determine

To explain: That if joint costs affect a sell as is or process further decision with reasons.

9.

To determine

That how “make-or-buy” concepts be applied to decisions at a service organization.

To explain: The types of make-or-buy decisions that might a service organization face.

10.

To determine

The constraints for company O, which builds outdoor furniture using a variety of woods and plastics.

To explain: At least four possible constraints at company O.

11.

To determine

To explain: The carbon offset and carbon footprint. Interest of company in selling carbon offset.

12.

To determine

To explain: The quantitative and qualitative factors for outsourcing its services.