Purchase Solution

Multiple choice - Accounting Problems

Not what you're looking for?

Ask Custom Question

A) Irrelevant costs include costs that are:
1 different among alternatives.
2 avoidable.
3 sunk.
4 opportunity costs.

b) The difference in total costs between two alternatives is referred to as the:
1 direct cost.
2 incremental cost.
3 sunk cost.
4 opportunity cost.

c) The purpose of incremental analysis is to find the alternative:
1 that contributes the most to operating income.
2 that brings in the most revenue.
3 with the lowest fixed costs.
4 with the fewest relevant costs.

d) In a special-order decision, which of the following costs would normally be irrelevant?
1 Packaging costs
2 Direct labor
3 Variable overhead
4 Fixed selling expenses

e) Avoidable costs are important for:
1 product mix decisions.
2 sell or process-further decisions.
3 decisions to eliminate unprofitable segments.
4 pricing decisions for special orders.

f) Direct costs include:
1 all product costs.
2 variable product costs.
3 some identifiable fixed costs and variable product costs.
4 some identifiable fixed costs.

g) As a general rule, a segment should not be eliminated if:
1 the company is profitable.
2 its direct fixed costs exceed its contribution margin.
3 the segment's fixed costs equal its variable costs.
4 its contribution margin exceeds direct fixed costs.

h) The point at which products are separated in a joint production process is the:
1 split-off point.
2 joint product point.
3 separation point.
4 breakeven point.

i) Relevant costs in a sell or process-further decision include:
1 costs of additional processing.
2 both additional revenues and additional costs.
3 revenues after additional processing.
4 joint product costs.

j) The objective of the sell or process-further decision is to:
1 maximize production.
2 maximize joint costs.
3 minimize processing.
4 maximize operating income

Purchase this Solution

Solution Summary

The solution answers multiple choice question related to irrelevant cost,total cost,incremental analysis,avoidable cost,direct cost,split off point,relevant cost.

Solution Preview

a) - sunk.
b) - opportunity cost
c) - that contributes the most to operating income
d) - Fixed ...

Purchase this Solution


Free BrainMass Quizzes
Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce