Questions from Cost Accounting

Q: What is price discrimination? How could a cost accountant help determine

What is price discrimination? How could a cost accountant help determine if differences in prices were evidence of price discrimination?

Q: If we want to maximize profit, why do we use unit

If we want to maximize profit, why do we use unit contribution margins in our analysis instead of unit gross margins?

Q: Why are production constraints important in determining the optimal product mix?

Why are production constraints important in determining the optimal product mix?

Q: What are some nonfinancial factors in decisions to drop a product line

What are some nonfinancial factors in decisions to drop a product line?

Q: The cost per seat-mile for a major U.S

The cost per seat-mile for a major U.S. airline is 13.7¢. Therefore, to estimate the cost of flying a passenger from Detroit to Los Angeles, we should multiply 1,980 miles by 13.7¢. Do you agree?

Q: On what three main factors does the theory of constraints focus?

On what three main factors does the theory of constraints focus?

Q: As a marketing manager for an airline, would you sell a

As a marketing manager for an airline, would you sell a seat to a passenger who walked up to the gate at the last minute at the variable (marginal) cost? Why or why not? Do the costs from the accounti...

Q: One of your acquaintances notes, “This whole subject of differential

One of your acquaintances notes, “This whole subject of differential costing is easy; variable costs are the only costs that are relevant.” How would you respond?

Q: A manager in your organization just received a special order at a

A manager in your organization just received a special order at a price that is “below cost.” The manager points to the document and says, “These are the kinds of orders that will get you in trouble....

Q: Many airline frequent-flier programs upgrade elite (high volume)

Many airline frequent-flier programs upgrade elite (high volume) flyers one, three, or five days in advance from economy to first class. What are the differential costs of doing this? What are the opp...