Questions from Managerial Accounting


Q: How might the decision to drop a product line affect a company’s

How might the decision to drop a product line affect a company’s remaining products?

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Q: Briefly explain what happens to total variable costs when a product line

Briefly explain what happens to total variable costs when a product line is dropped.

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Q: Classify each of the following as Prevention (P), Appraisal or

Classify each of the following as Prevention (P), Appraisal or Inspection (AI), Internal Failure (IF), or External Failure (EF) costs. 1. Cost of scrapped product. 2. Damage to company’s reputation. 3...

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Q: Identify three opportunity costs that might result from a decision to eliminate

Identify three opportunity costs that might result from a decision to eliminate a business segment.

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Q: Suppose you are considering a part-time job to earn some

Suppose you are considering a part-time job to earn some extra spending money. List four factors that could affect that decision and would be included in Step 3 of your decision-making process.

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Q: Explain how a constrained resource impacts management decisions in both the long

Explain how a constrained resource impacts management decisions in both the long term and the short term.

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Q: Why do decisions involve a constrained resource focus on contribution margin instead

Why do decisions involve a constrained resource focus on contribution margin instead of profit margin?

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Q: Tom Ellis recently bought a plasma television and has since stated that

Tom Ellis recently bought a plasma television and has since stated that he would not recommend it to others. This indicates that Tom has completed which step of the decision-making process?

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Q: What are the criteria for a cost to be considered relevant to

What are the criteria for a cost to be considered relevant to any decision?

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Q: How is an avoidable cost related to a relevant cost?

How is an avoidable cost related to a relevant cost?

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