Question

Ttue/False Questions (1 point each) Circle One 1. The value chain comprises activities from research and des production process, but does not include activities related Id development through the or services Clated to the distribution of products True False 2. Cost information used for one managerial decision could be irrelevant for anot managerial decision. True False inting information to be comparable between firms 3. It is more important for financial accounting information to be comparab than to be useful for managerial decision-making. True False 4. The cost of an item is the sacrifice made to acquire it. True False 5. Accounting systems typically record opportunity costs as assets and treat them as intangible items on the financial statements. True False 6. Only direct costs can be classified as product costs: indirect costs are classified as period costs. True False 7. The break-even point for an organization with a low operating leverage will be relatively higher than the break-even point for an organization with a high operating leverage. True False 8. An increase in an organization's fixed costs will result in a lower margin of safety, assuming all other costs and sales remain unchanged. True False 9. Only variable costs can be differential costs. True False 10. Short-run decisions often have long-run implications, True False

Answer 1

1. False. Value chain include activities such as production, Marketing and sales, logistics, research and development, human resources, information system and the firm's infrastructure.

2. True. May be cost information used in one managerial decision not useful for other one.

3.False. We cannot say like that. financial accounting information is important for both comparison and managerial decision making.

4. True. in simple sense we can say that cost of an item is the sacrifice made to acquire it.

5. False. Accounting system not record opportunity cost. but it is considered for managerial decision making.

6.False. Product cost include not only Direct cost but also Manufacturing overhead.

7.False. higher operating leverage means higher fixed cost. if the fixed cost is higher BEP also higher.

8.True. margin of safety is the difference between actual sales and BEP sales. If the fixed cost increases BEP sales also increases, so the margin of safety will decrease.

9.False. Differential Cost include both variable and fixed cost.

10. True. short run decision may have long run implications. short run is situation where only variable factor can be changed.