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Unformatted text preview: Unit 9: Differential Analysis and Product Pricing - Practice for Review 1. The costs of initially producing an intermediate product should be considered in deciding whether to further process a product, even though the costs will not change, regardless of the decision. (Points: 1) True False 2. In deciding whether to accept business at a special price, the short-run price should be set high enough to cover all costs and expenses, plus provide a reasonable amount for profit. (Points: 1) True False 3. In deciding whether to accept business at a special price, the short-run price should be set high enough to cover all variable costs and expenses. (Points: 1) True False 4. Eliminating a product or segment may have the long-term effect of reducing fixed costs. (Points: 1) True False 5. Make or buy options often arise when a manufacturer has excess productive capacity in the form of unused equipment, space, and labor. (Points: 1) True False 6. In addition to the differential costs in an equipment replacement decision, the remaining useful life of the old...
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This note was uploaded on 10/05/2010 for the course ACCOUNTING n/a taught by Professor N/a during the Summer '09 term at Kaplan University.
- Summer '09