Question

Instructions: Choose the best answer (True or False) for record a "T" for True or a "F" for False corresponding letters on the line to the lef "A" for True or a "B" for False on the SCANTRON sheet for rows 16 thru 50 21. In incremental analysis, total variable costs will always change under alternative courses of action, and total fixed costs will always remain constant. Decision-making involves choosing among altemative courses of action. 22. 23. A special one-time order should never be accepted if the unit sales price is less than the unit variable cost. 24. If an incremental make or buy analysis indicates that it is cheaper to buy rather than make an item, management should always make the decision to choose the lowest cost alternative. In a decision concerning replacing old equipment with new equipment, the book value of the old equipment can be considered a sunk cost. 25. The difference between the target price and the desired profit is the target cost of the product. 26. 27. The cost-plus pricing model gives consideration to the demand side-whether customers will pay the target selling price. 28. In time-and-material pricing, the material charge is based on the cost of direct materials used and a material loading charge for related overhead costs. 29. The first step for time-and-material pricing is to calculate the material loading charge. 30. Using the negotiated transfer pricing approach, a minimum transfer price is established by the selling division. 31. If a cost-based transfer price is used, the transfer price must be based on variable cost. 32. A negotiated transfer price should be used when an outside market for the goods does not exist. A budget can be a means of communicating a company's objectives to external parties. 33. 34. Budgets can have a positive or negative effect on human behavior depending on the manner in which the budget is developed and administered. Budgeting and long-range planning are two terms that describe the same process. 35. The direct materials budget contains both quantity and cost data. 36. 37. The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first.

Answer 1

21. False

22. True

23. True

24.False

25. True

26. True

27. False

28.True

29.False

30. True

31. False

32. True

33. False

34. True

35. False

36. True

37. True.