Which of the following is true for a make or buy decision? * O The reliability of the outside supplier of the component is important to the decision. O Depreciation on equipment used in making the component and having no other use. O Opportunity costs are irrelevant. The company should make the component if the purchase price is less than the per unit variab

Which of the following is true for a make or buy decision? * O The reliability of the outside supplier of the component is important to the decision. O Depreciation on equipment used in making the component and having no other use. O Opportunity costs are irrelevant. The company should make the component if the purchase price is less than the per unit variab

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 15MC: When operating in a constrained environment, which products should be produced? A. products with the...

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When operating in a constrained environment, which products should be produced? A. products with the highest contribution margin per unit B. products with the highest contribution margin per unit of the constrained process C. products with the highest selling price D. products with the lowest allocated joint cost
When making outsourcing decisions, which of the following is true? a. Expected use of the freed capacity is irrelevant. b. The variable cost of producing the product in-house is relevant. c. The total manufacturing unit cost of making the product in-house is relevant. d. Avoidable fixed costs are irrelevant.
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.
Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.
Which of the following statements best describes a by-product? Multiple Choice A product created along with the main product whose sales value does not cover its cost of production. A product that is produced from material that would otherwise be scrap. A product that usually produces a small amount of revenue when compared to the main product's revenue. A product that has a lower unit selling price than the main unit. A product that has a selling price similar to that of the main product.
All of the following should be considered in a make-or-buy decision excepta. quality issues with the supplierb. future growth in the plant and other production opportunitiesc. whether the supplier will make a profit that would no longer belong to the business d. cost savings
52. Which of the following is true for a make-or-buy decision? Group of answer choices b. Depreciation on equipment used in making the component and having no other use is the critical factor in the decision. c. The company should make the component if the purchase price is less than the per-unit variable cost to make the component. d. The reliability of the outside supplier of the component is unimportant to the decision as this is not quantifiable. e. The quality of the component from the outside supplier is relevant in eventually making the decision.
When deciding whether to make or buy a component part, the most relevant consideration is often: Question options: a) The sunk cost of equipment used to manufacture the part. b) The unavoidable fixed manufacturing costs. c) The average total cost of making the part. d) The variable manufacturing costs per unit.
Which of the following is not a qualitative factor that Atlas Manufacturing should consider when deciding whether to buy or make a part used in manufacturing their product? a. Quality of the outside producer’s product. b. Potential loss of trade secrets. c. Manufacturing deadlines and special orders. d. Variable cost per unit of the product.
When deciding whether to sell as is or process a product further, managers should ignore which of the following? a. The costs of processing the product thus far b. The cost of processing further c. The revenue if the product is sold as is d. The revenue if the product is processed further
Which of the following items would be relevant in the decision of buying a component part instead of making it? I) The variable cost of making the component part II) The cash proceeds from selling the special equipment used to make the component part III) The cost of buying the component part from an outside supplier IV) The general fixed cost that is allocated to the component part Multiple Choice a) I), II), and IV) b) I), II), and III) c) I) and III) d) II) and IV)
Which of the following statements is true? An avoidable fixed production cost incurred before the split-off point in a joint process is relevant in a sell or process further decision. It is profitable to continue processing joint products after the split-off point if their total revenues exceed the joint costs. Which of the following statements is true? Consistency demands that a cost that is relevant in one decision be regarded as relevant in other decisions as well. Variable costs are always relevant costs in decisions.