361-Chapter-10-MC-Solutions

Chapter10—RelevantInformationforDecisionMakingMULTIPLECHOICE1.Costsforgonewhenanindividualororganizationchoosesoneoptionoveranotherarea.budgetedcosts.b.sunkcosts.c.historicalcosts.d.opportunitycosts.ANS:DPTS:1DIF:EasyOBJ:10-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling2.Whichofthefollowingcostswouldnotbeaccountedforinacompany'srecordkeepingsystem?a.anunexpiredcostb.anexpiredcostc.aproductcostd.anopportunitycostANS:DPTS:1DIF:EasyOBJ:10-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling3.Whichofthefollowingisnotacharacteristicofrelevantcostinginformation?Itisa.associatedwiththedecisionunderconsideration.b.significanttothedecisionmaker.c.readilyquantifiable.d.relatedtoafutureendeavor.ANS:CPTS:1DIF:EasyOBJ:10-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModelingChapter1024.Afixedcostisrelevantifitisa.uncontrollable.b.avoidable.c.sunk.d.aproductcost.ANS:BPTS:1DIF:EasyOBJ:10-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling5.Relevantcostsarea.allfixedandvariablecosts.b.allcoststhatwouldbeincurredwithintherelevantrangeofproduction.c.pastcoststhatareexpectedtobedifferentinthefuture.d.anticipatedfuturecoststhatwilldifferamongvariousalternatives.ANS:DPTS:1DIF:EasyOBJ:10-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling6.Whichofthefollowingistheleastlikelytobearelevantitemindecidingwhethertoreplaceanoldmachine?a.acquisitioncostoftheoldmachineb.outlaytobemadeforthenewmachinec.annualsavingstobeenjoyedonthenewmachined.lifeofthenewmachineANS:APTS:1DIF:EasyOBJ:10-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling7.Ifacostisirrelevanttoadecision,thecostcouldnotbea.asunkcost.b.afuturecost.c.avariablecost.d.anincrementalcost.ANS:DPTS:1DIF:EasyOBJ:10-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling8.Whichofthefollowingcostswouldberelevantinshort-termdecisionmaking?a.incrementalfixedcostsb.allcostsofinventoryc.totalvariablecoststhatarethesameintheconsideredalternativesd.thecostofafixedassetthatcouldbeusedinalltheconsideredalternativesANS:APTS:1DIF:EasyOBJ:10-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModelingChapter1039.Thetermincrementalcostreferstoa.theprofitforegonebyselectingonechoiceinsteadofanother.b.theadditionalcostofproducingorsellinganotherproductorservice.c.acostthatcontinuestobeincurredintheabsenceofactivity.d.acostcommontoallchoicesinquestionandnotclearlyorfeasiblyallocabletoanyofthem.ANS:BPTS:1DIF:EasyOBJ:10-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling10.Acostissunkifita.isnotanincrementalcost.b.isunavoidable.c.hasalreadybeenincurred.d.isirrelevanttothedecisionathand.ANS:CPTS:1DIF:EasyOBJ:10-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling11.Most____arerelevanttodecisionstoacquirecapacity,butnottoshort-rundecisionsinvolvingtheuseofthatcapacity.a.sunkcostsb.incrementalcostsc.fixedcostsd.primecostsANS:CPTS:1DIF:EasyOBJ:10-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling12.IrrelevantcostsgenerallyincludeSunkcostsHistoricalcostsAllocatedcostsa.yesyesnob.yesnonoc.nonoyesd.yesyesyesANS:DPTS:1DIF:EasyOBJ:10-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling13.Indecidingwhetheranorganizationwillkeepanoldmachineorpurchaseanewmachine,amanagerwouldignorethea.estimateddisposalvalueoftheoldmachine.b.acquisitioncostoftheoldmachine.c.operatingcostsofthenewmachine.d.estimateddisposalvalueofthenewmachine.ANS:BPTS:1DIF:EasyOBJ:10-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModelingChapter10414.Thepotentialrentalvalueofspaceusedforproductionactivitiesa.isavariablecostofproduction.b.representsanopportunitycostofproduction.c.isanunavoidablecost.d.isasunkcostofproduction.ANS:BPTS:1DIF:EasyOBJ:10-3NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling15.Theopportunitycostofmakingacomponentpartinafactorywithexcesscapacityforwhichthereisnoalternativeuseisa.thetotalmanufacturingcostofthecomponent.b.thetotalvariablecostofthecomponent.c.thefixedmanufacturingcostofthecomponent.d.zero.ANS:DPTS:1DIF:EasyOBJ:10-3NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling16.Whichofthefollowingarerelevantinamakeorbuydecision?VariablecostsAvoidablefixedcostsUnavoidablefixedcostsa.noyesyesb.yesnoyesc.nonoyesd.yesyesnoANS:DPTS:1DIF:EasyOBJ:10-3NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling17.Inamakeorbuydecision,theopportunitycostofcapacitycoulda.beconsideredtodecreasethepriceofunitspurchasedfromsuppliers.b.beconsideredtodecreasethecostofunitsmanufacturedbythecompany.c.beconsideredtoincreasethepriceofunitspurchasedfromsuppliers.d.notbeconsideredsinceopportunitycostsarenotpartoftheaccountingrecords.ANS:APTS:1DIF:EasyOBJ:10-3NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModelingChapter10518.Whichofthefollo