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False under the opportunity cost approach the cost of

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FalseUnder the opportunity cost approach, the cost of each alternative includes theincremental costs and the opportunity cost.TrueWhen capacity is constrained, the relevant revenues and costs of any alternative equalthe incremental future revenues and costs plus the opportunity cost.TrueProduct-mix decisions usually have only a short-run focus because they typically arisein the context of capacity constraints that can be relaxed in the long runTrueFor short-run product-mix decisions, managers should focus on minimizing total fixedcosts.FalseFor short-run product-mix decisions, maximizing contribution margin will also result inmaximizing operating income.TrueTo maximize profits, managers should produce more of the product with the greatestcontribution margin per unit of the constraining resource.TrueWhen there is a constraining resource, a firm should attempt to maximize sales of theproduct or service with the greatest contribution margin per unit.FalseOperating costs include all operating costs except depreciation.FalseThe theory of constraints is more useful for the long-run management of costs since ittakes a long-run
perspective and focuses on improving processes by eliminating non-value-addedactivities and reducing the costs of performing value-added activities.FalseActivity based costing (ABC) systems are less useful than the theory of constraints(TOC) for long-run pricing, cost control, and capacity management.FalseOverhead costs allocated to the sales office and individual customers are alwaysrelevant.FalseAvoidable variable and fixed costs should be evaluated when deciding whether todiscontinue a product, product line, business segment, or customer.TrueDepreciation allocated to a product line is a relevant cost when deciding to discontinuethat product.FalseIn a decision as to whether or not to drop a product, fixed costs that have beenallocated to that product are generally not relevantTrueA company is considering adding a fourth product to use available capacity. A relevantfactor to consider is that corporate costs can now be allocated over four products ratherthan only three.FalseWhen replacing an old machine with a new machine, general administration costs areirrelevant.TrueWhen replacing an old machine with a new machine, the book value of the old machineis a relevant cost.FalsePerformance evaluation focuses on responsibility centers for a specific period, not onprojects or individual items of equipment over their useful lives.True1. Budgeting is the common accounting tool companies use for planning and controlling.Budgetsa. provide a measure of planned financial results.b. are prepared independent of the company's long-term strategies.

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Term
Summer
Professor
BEISER
Tags
Cost Accounting, Nobis Company

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