Questions from Managerial Accounting

Q: What behavioral factors may influence some managers to consider sunk costs as

What behavioral factors may influence some managers to consider sunk costs as being relevant in their decisions?

Q: Are fixed costs always irrelevant?

Are fixed costs always irrelevant?

Q: What is a cost center?

What is a cost center?

Q: Provide an example of a fixed cost that would be relevant to

Provide an example of a fixed cost that would be relevant to a make-or-buy decision, and an example of a fixed cost that would not be relevant to such a decision.

Q: What qualitative considerations are relevant in a make-or-buy

What qualitative considerations are relevant in a make-or-buy decision?

Q: In analyzing whether to drop a product or department, what are

In analyzing whether to drop a product or department, what are two difficulties that arise related to the impact on costs or revenues?

Q: “Prices must cover both variable and fixed costs of production.”

“Prices must cover both variable and fixed costs of production.” Do you agree with this statement? Explain.

Q: “When production capacity is limited and it is possible to obtain

“When production capacity is limited and it is possible to obtain additional customer orders, a firm must consider its opportunity costs to evaluate the profitability of these new orders.” Do you agre...

Q: What are some different managerial uses of cost information?

What are some different managerial uses of cost information?

Q: Explain the difference between variable costs and fixed costs.

Explain the difference between variable costs and fixed costs.