Amr - done -- f.e test 4(Answer)

Amr - done -- f.e test 4(Answer) - Final Exam Accounting...

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Final Exam Accounting For Managers 2 hours ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ ــــــــــــــــــــــــــــــــــــــــــــــــــــــ Q1: True OR False (15 marks) : 1. Opportunity costs never appear in a company’s accounting records since they are foregone costs and not actual costs. Answer: True Terms to Learn: opportunity cost 2. For short-run product-mix decisions, managers should focus on minimizing total fixed costs. Answer: False Terms to Learn: decision model For short-run product mix decisions, managers should focus on maximizing total contribution margin. 3. Sometimes qualitative factors are the most important factors in make-or-buy decisions. Answer: True Terms to Learn: qualitative factors 4. Outsourcing is risk free to the manufacturer because the supplier now has the responsibility of producing the part. Answer: False Terms to Learn: outsourcing, make-or-buy decision Outsourcing has risks since the manufacturer is dependent on the supplier for a quality product, delivered in a timely manner, for a reasonable price. 5. Management should focus on per unit costs when deciding whether to discontinue a product or not. Answer: False Terms to Learn: full costs of the product Management should focus on total costs when deciding whether to discontinue a product or not. 6. A four-quarter rolling budget encourages management to be thinking about the next 12 months. Answer: True Terms to Learn: rolling budget 7. Since fixed manufacturing overhead is fixed, it is not normally included in the operating budget. Answer: False Terms to Learn: operating budget Fixed manufacturing is normally included in the operating budget. 8. The manufacturing labor budget depends on wage rates, production methods, and hiring plans. Answer: True
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Terms to Learn: operating budget 9. All variable costs are relevant and all fixed costs are irrelevant. Answer: False Terms to Learn: relevant costs All variable costs are not necessarily relevant and all fixed costs are not necessarily irrelevant. 10. In a decision as to whether or not to drop a product, fixed costs that have been allocated to that product are always relevant. Answer: False Terms to Learn: relevant costs In a decision as to whether or not to drop a product, fixed costs that have been allocated to that product are generally not relevant.
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