Questions from Managerial Accounting


Q: What is meant by the terms margin and turnover in ROI calculations

What is meant by the terms margin and turnover in ROI calculations?

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Q: What is meant by residual income?

What is meant by residual income?

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Q: Why do the measures used in a balanced scorecard differ from company

Why do the measures used in a balanced scorecard differ from company to company?

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Q: What is a relevant cost?

What is a relevant cost?

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Q: Are variable costs always relevant costs? Explain.

Are variable costs always relevant costs? Explain.

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Q: Assume that a company has two processing departments—Mixing followed by

Assume that a company has two processing departments—Mixing followed by Firing. Explain what costs might be added to the Firing Department’s Work in Process account during a period.

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Q: “Sunk costs are easy to spot—they’re simply the fixed

“Sunk costs are easy to spot—they’re simply the fixed costs associated with a decision.”Do you agree? Explain.

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Q: All future costs are relevant in decision making. Do you agree

All future costs are relevant in decision making. Do you agree? Why?

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Q: Prentice Company is considering dropping one of its product lines. What

Prentice Company is considering dropping one of its product lines. What costs of the productline would be relevant to this decision? Irrelevant?

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Q: What is the danger in allocating common fixed costs among product lines

What is the danger in allocating common fixed costs among product lines or other segmentsof an organization?

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