Question

Question 1

(A)

An advantage of centralised decision-making is: Greater effectiveness in volatile environments More motivated employees Less monitoring of decisions More rapid decision making in all contexts

(B)

(C)

(D)

Answer 1

Based on the information available in the question, we can answer as follows:-

Requirement 1:-

A.) An advantage of centralised decision-making is :-

Option D - More rapid decision making in all contexts is the correct answer. A centralized decision making helps to improve the pace at which the management makes decisions. Since all the decisions are arrived at by a central team, the need to consult different levels of management is avoided and decisions are arrived at fastly. Hence, this is the correct answer.

Option A, Option B and Option C are incorrect as these are not the advantages of the centralized decision making.

B.) The total amount of variable costs will:-

Option B - Changes proportionately with changes in activity. Variable costs generally move up or move below on a per unit basis. Higher the production, higher the variable costs and lower the production levels, lower the variable costs. Hence, this is the correct answer.

Option A, Option. C and Option D are incorrect as these are not the attributes of a variable costing system.

C.) Opportunity cost can be defined as:-

Option D - A benefit forgone by choosing one alternative over another. Opportunity cost is the cost of choosing the next best alternative. Opportunity cost is the cost of not selecting a particular option and selecting the next best option. Hence, this is the correct answer.

Option A is incorrect as it not the cost incurred because of an incorrect decision.

Option B and Option C are also not the attributes of Opportunity costs.

D.) The term cost acconting is :-

Option D - A synonym for the term management accounting. Cost accounting is a synonym for the term managmeent accounting that focusses on calculating and assessing the total cost of production by including the total variable costs and total fixed costs. The focus of cost accounting to is to minize the costs and maximise the profits.

Option A is incorrect as cost accounting and Financial accounting are different.

Option B and Option C are incorrect and are not true of cost accounting.

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