Chap013

Cost Management: Strategies for Business Decisions

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Chapter 13 - Cost Management and Decision Making Chapter 13 Cost Management and Decision Making True / False Questions 1. An analysis of outsourcing requires an analysis of quality as well as costs. TRUE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Difficulty: Medium Learning Objective: 1 2. To properly use price-led costing, a company needs to study only its cost. FALSE AACSB: Analytic AICPA BB: Critical Thinking, Marketing AICPA FN: Decision Making Difficulty: Medium Learning Objective: 4 3. Most not-for-profit organizations have a zero overall target profit. TRUE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Difficulty: Medium Learning Objective: 1 4. Charging varying prices for the same product is always illegal because it is discriminatory. FALSE AACSB: Analytic, Legal AICPA BB: Critical Thinking, Legal AICPA FN: Decision Making Difficulty: Easy Learning Objective: 4 13-1
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Chapter 13 - Cost Management and Decision Making 5. To achieve target costing, organizations are often required to redesign their systems. TRUE AACSB: Analytic AICPA BB: Critical Thinking, Marketing AICPA FN: Decision Making Difficulty: Easy Learning Objective: 1 6. The target price is found by multiplying the target cost times one plus the target profit percentage. FALSE AACSB: Analytic AICPA BB: Critical Thinking, Marketing AICPA FN: Decision Making Difficulty: Medium Learning Objective: 1 7. It is important in decision making to focus only on future decisions; decisions made in the past should not be considered. FALSE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Difficulty: Medium Learning Objective: 1 8. In decision making, feedback is important because it enhances learning. TRUE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Difficulty: Easy Learning Objective: 1 13-2
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Chapter 13 - Cost Management and Decision Making 9. Because facility costs are fixed and do not change with volume changes, these cost are never relevant in considering alternatives. FALSE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Difficulty: Medium Learning Objective: 1 10. Target pricing can be found at the intersection of the demand and supply curve. FALSE AACSB: Analytic AICPA BB: Critical Thinking, Marketing AICPA FN: Decision Making Difficulty: Easy Learning Objective: 1 11. Tangible Objectives are abstract goals of the organization. FALSE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Difficulty: Easy Learning Objective: 1 12. Not-for-profit organizations do not need goals and objectives. FALSE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Difficulty: Easy Learning Objective: 1 13-3
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Chapter 13 - Cost Management and Decision Making 13. The target profit equals the desired return on sales times the contribution margin. FALSE
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This document was uploaded on 06/26/2011.

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Chap013 - Chapter 13 - Cost Management and Decision Making...

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