Cost Accounting 11 - Cost Accounting, 13e (Horngren et al.)...

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Cost Accounting, 13e (Horngren et al.) Cost Accounting, 13e (Horngren et al.) Chapter 11 Decision Making and Relevant Information 58) A decision model involves: A) only quantitative analyses B) both quantitative and qualitative analyses C) only qualitative analyses D) a manager's instinct Answer: B Diff: 1 Terms: decision model Objective: 1 AACSB: Reflective thinking 59) Feedback regarding previous actions may affect: A) future predictions B) implementation of the decision C) the decision model D) All of these answers are correct. Answer: D Diff: 2 Terms:
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decision model Objective: 1 AACSB: Reflective thinking 60) Place the following steps from the five-step decision process in order: A = Make predictions about future costs B = Evaluate performance to provide feedback C = Implement the decision D = Choose an alternative A) D C A B B) C D A B C) A D C B D) D C B A Answer: C Diff: 2 Terms: decision model Objective: 1 AACSB: Reflective thinking 61) The formal process of choosing between alternatives is known as a(n): A) relevant model B) decision model C) alternative model D) prediction model Answer:
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B Diff: 1 Terms: decision model Objective: 1 AACSB: Reflective thinking 62) Ruggles Circuit Company manufactures circuit boards for other firms. Management is attempting to search for ways to reduce manufacturing labor costs and has received a proposal from a consulting company to rearrange the production floor next year. Using the information below regarding current operations and the new proposal, which of the following decisions should management accept? Currently Proposed Required machine operators 5 4.5 Materials-handling workers 1.25 1.25 Employee average pay $8 per hour $9 per hour Hours worked per employee 2,100 2,000 A) Do not change the production floor. B) Rearrange the production floor. C) Either, because it makes no difference to the employees. D) It doesn't matter because the costs incurred will remain the same. Answer: B Explanation: B) Current operations: 5 workers ? 2,100 hours ? $8.00 = $84,000 Proposal: 4.5 workers ? 2,000 hours ? $9.00 = $81,000 Diff: 2 Terms: decision model Objective:
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AACSB: Analytical skills Answer the following questions using the information below: LeBlanc Lighting manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year. With a 50- cent price increase, demand is expected to fall by 3,000 units. Currently Projected Demand 20,000 units 17,000 units Selling price $4.50 $5.00 Incremental cost per unit $3.00 $3.00 63) If the price increase is implemented, operating profit is projected to: A) increase by $4,000 B) decrease by $4,000 C) increase by $6,000 D) decrease by $4,500 Answer: A Explanation: A) [17,000 ? ($5 - $3)] - [20,000 ? ($4.50 - $3.00)] = increase of $4,000 Diff: 2 Terms: decision model Objective: 1 AACSB: Analytical skills 64) Would you recommend the 50-cent price increase? A)
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Cost Accounting 11 - Cost Accounting, 13e (Horngren et al.)...

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