In: Accounting
13-A contribution price, one lower than the regular price is most appropriate under the following conditions except: Select one: a. where there is full capacity b. where there is idle capacity c. where operating in a distress situation d. when faced with sharp competition e. when in a competitive bidding situation
14-
Examples of outsourcing decisions include all except:
Select one:
a. whether to buy or make sub components
b. whether to process payroll in-house or outside service
c. provide processing services internally or buy them
d. manage fleets of vehicles or use outside delivery service
e. use in house selling or inside marketing
15-
Management can relax a constraint by all but:
Select one:
a. expand the capacity of a bottleneck
b. outsourcing or subcontracting
c. working overtime
d. eliminate value-added activities at the bottleneck
e. retraining employees and shifting them to the bottleneck
16-Common mistakes to avoid in decision making when identifying relevant costs and benefits include all except:
Select one:
a. ignore sunk costs
b. beware of unitized fixed costs in decision making
c. beware of out-of-pocket-costs
d. beware of allocated fixed costs; identifying the avoidable costs
e. fail to identify opportunity cost
17-
Long-term investment features include all except:
Select one:
a. large amounts of initial cash outlay
b. recurring cash in flows over the life of the investment
c. income tax factors
d. time value of money
e. segmenting profit margins
17
13. A contribution price is lower than regular price when faced with sharp competition as only lowering the price is the option to keep the market share. Thus, option d is the correct answer.
14. Example of outsource decision does not include use in house selling or inside marketing as both are options within an organization. Thus, option e is the correct answer.
15. Management can relax a constraint by all except eliminating value added activities at the bottleneck as this would not result in relaxation of constraint. Thus, option d is the correct answer.
16. Beware of unitized fixed costs in decision making is not a common mistake in decision making as to identify relevant costs and benefits. Thus, option b is the correct answer.
17. Long term investment features include all except segmenting profit margins as it has nothing to do with long term investment. Thus, option e is the correct answer.