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ch4 Student: ___________________________________________________________________________ 1. Differential analysis involves the comparison of one or...

For question #74, in the answer [$32 - 12 - 6 - 4 - 0.50] × 2,000 = $19,000 where is the "4" come from?
ch4 Student: ___________________________________________________________________________ 1. Differential analysis involves the comparison of one or more alternative courses of action with the status quo. True False 2. If there is only one alternative course of action and the status quo is unacceptable, then there really is no decision to make. True False 3. A decision must involve at least two alternative courses of action. True False 4. Differential analysis cannot be used for long-run decisions because it cannot incorporate the timing of revenues and costs (i.e., the time-value of money). True False 5. Short-run decisions often have long-run implications. True False 6. Only variable costs can be differential costs. True False 7. Fixed costs are always classified as sunk costs in differential cost analysis. True False 8. The full cost fallacy occurs when a decision-maker fails to include fixed manufacturing overhead in the product's cost. True False 9. When deciding whether or not to accept a special order, a decision-maker should focus on differential costs instead of full costs. True False 10. The differential analysis approach to pricing for special orders could lead to under-pricing in the long-run because fixed costs are not included in the analysis. True False 11. Target costs equal the difference between the target selling price and the desired profit margin. True False
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12. Dumping occurs when a company exports its product to consumers in another country at an export price that is below the domestic price. True False 13. Price discrimination is the practice of selling identical goods or services to different customers at different prices. True False 14. Peak load pricing is the practice of setting prices lowest when the quantity demanded for the product approaches the physical capacity to produce it. True False 15. The alternative courses of action in a make-or-buy decision are (a) manufacture needed items internally or (b) purchase needed items externally. True False 16. The reason opportunity costs are not included in the accounting system is because they involve estimates. True False 17. Financial statements prepared in accordance with generally accepted accounting principles (GAAP) provide differential cost information. True False 18. In the short-run, plant capacity is fixed and product choices have to be made that optimize the use of available capacity. True False 19. With constrained resources, the important measure of profitability is the contribution margin per unit of scarce resource. True False 20. The theory of constraints focuses on determining the optimal product mix when one or more resources restrict the attainment of a goal or objective. True False 21. The relevance of a particular cost to a decision is determined by the: (CMA adapted) A. riskiness of the decision. B. number of decision variables. C. amount of the cost. D. potential effect on the decision. E. accuracy of the cost.
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