Questions from Cost Accounting

Q: What is measured by the net present value (NPV) of

What is measured by the net present value (NPV) of a potential project? If the NPV of a project is $0, is it an acceptable project? Explain.

Q: Will the NPV amount determined in the capital budgeting process be the

Will the NPV amount determined in the capital budgeting process be the same amount as that which actually occurs after a project is undertaken? Why or why not?

Q: How is the profitability index (PI) related to the NPV

How is the profitability index (PI) related to the NPV method? What does the PI measure?

Q: Production of ethanol, made from corn, is on the rise

Production of ethanol, made from corn, is on the rise. Some states are even requiring that ethanol be blended in small amounts with gasoline to reduce pollution. The problem is that there is not enoug...

Q: How can a company evaluate whether it is effectively managing its costs

How can a company evaluate whether it is effectively managing its costs?

Q: By what criteria would management determine whether to proceed with processing at

By what criteria would management determine whether to proceed with processing at each decision point in a joint production process?

Q: Describe sunk costs. Are there circumstances in which sunk costs are

Describe sunk costs. Are there circumstances in which sunk costs are relevant to decisions? Discuss.

Q: Why is it not possible simply to take a cost management system

Why is it not possible simply to take a cost management system “off the shelf. ”?

Q: What is a capital asset? How is it distinguished from other

What is a capital asset? How is it distinguished from other assets?

Q: When the algebraic method of allocating support department costs is used,

When the algebraic method of allocating support department costs is used, total costs for each support department increase from what they were prior to the allocation. Why does this occur, and how are...