43 The most profitable use of a resource tha thas limited capacity and is needed in theproduction of more than one product is a function of which of the following? *O The number of units of each product the company can sell.O The contribution margin of each product.O The amount of resource-use required for each unit of each productO All of the choices

In the case of limited or constrained resources, a business wants to maximize its profit by…

The most profitable use of a resource tha thas limited capacity and is needed in the production of more than one product is a function of which of the following? * H The number of units of each product the company can sell. The contribution margin of each product. The amount of resource-use required for each unit of each product O All of the choices

The most profitable use of a resource tha thas limited capacity and is needed in the production of more than one product is a function of which of the following? * H The number of units of each product the company can sell. The contribution margin of each product. The amount of resource-use required for each unit of each product O All of the choices

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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When a firm has the opportunity to add a project that will utilize excess factory capacity (what is currently not being used), which costs should be used to determine if the added project should be undertaken?A Opportunity CostB Sunk Cost C Incremental CostsD None of the above
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A fixed cost is a cost that does not vary in the short run with a specified activity. The defining characteristic of a fixed cost is that it depends on the amount of a resource that is acquired rather than the amount that is used. For this reason fixed costs are often called capacity-related costs. Write 300 to 400 words that explain the difference between fixed costs and variable costs. The example may be of a company you’ve worked with or another company that has these types of costs
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When making outsourcing decisions, which of the following is true? The expected use of the freed capacity is irrelevant. The variable cost of producing the product in-house is relevant. The total manufacturing unit cost of making the product in-house is relevant. Avoidable fixed costs are irrelevant.
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