7.)management accounts shiuod inly consider incremental costs when making long-run pricing decisions. True or False 10.)price...
Question 5 2 pts Should we consider sunk costs when making decisions about the present or the future? No, sunk costs cannot be recovered. Yes, we should consider all costs when making decisions for the present and the future. No, sunk costs have a non-monetary value; therefore, we should not consider the costs. Yes, sunk costs are avoidable, so we should consider the costs when making decisions. Previous Question 6 2 pts Producers selling their ice cream as "95% fat...
Which of the following is an approach to long-run pricing decisions? A. Opportunistic pricing, which is based on demand and competition. Prices are decreased when demand is weak and competition is strong and increased when demand is strong and competition is weak. B. Cost-based pricing, which asks, "What does it cost us to make this product and, hence, what price should we charge that will recoup our costs and achieve a target return on investment?" C. Market-based pricing, an important...
Answer these following questions: 1. Only variable costs can be relevant or differential cost A. True B. False 2. Fixed Costs which change with a decisions are relevant A. True B. False 3. Sunk costs are always relevant to decisions A. True B. False 4. In incremental analysis, total fixed costs will always remain constant A. True B. False 5. A special order should not be accepted if the sales price is less than the unit variable cost. A. B....
1) When making Managerial decisions, explain what financial and non-financial information is involved in the decision making process? 2) Explain the following concepts utilized in Incremental Analysis--Relevant Costs, Opportunity Costs and Sunk Costs? 3) What is the purpose of incremental analysis used by a company? 4) Why do we only look at relevant costs in accepting or rejecting a special order at a set price? What assumptions are made in this decision-making process? 5) What factors do we look at...
Decisions on the price to bid on a one−time−only special order should include A. existing fixed manufacturing overhead. B. cost data, and the use of variable costing income statements. C.only the potential bids of competitors. D.cost data and potential bids of competitors. E. only cost data Which of the following is TRUE of alternative long−run pricing approaches? A. market−based approach only considers how customers will react. B. A cost−based approach only considers how customers will react. C. A market−based approach...
1. How is activity-based costing useful for pricing decisions? A. It helps managers to manage costs during value engineering by identifying the cost impact of eliminating, reducing, or changing various activities. B. It gives managers more accurate product-cost information for making pricing decisions. C. It allows managers to focus on locked-in costs, that, if eliminated would not reduce the actual value or utility customers gain from using the product or service. D. Both A and B are correct. 2. What...
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...
When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net income, when evaluating projects. To determine the incremental cash flows associated with a capital project, an analyst should include all of the following except: The project's financing costs The project's depreciation expense Changes in net working capital associated with the project The project's fixed-asset expenditures O Indirect cash flows often affect a firm's capital budgeting decisions. However, some of these indirect cash flows are...
7. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. COSTS (Dollars per pound) MC D AVC 0 + 0 + 10 + + + + + + + 20 30 40 50 60 70 80 QUANTITY (Thousands of...
3. Identifying incremental cash flows Aa Aa E When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net income, when evaluating projects. To determine the incremental cash flows associated with a capital project, an analyst should include all of the following except: The project's fixed-asset expenditures Changes in net working capital associated with the project The project's depreciation expense The project's financing costs Indirect cash flows often affect a firm's capital budgeting decisions. However,...