Cost-plus pricing
________ starts with the product's total costs and adds a desired profit to determine a cost-plus price.
the extra revenue is greater than the extra cost to continue manufacturing a product
A managerial accountant needs to make a sell or continue to process decision about a product. The managerial accountant should continue manufacturing the product instead of selling the product if ________.
Avoidable fixed costs
________ include costs that may be eliminated as a result of discontinuing the product
D) A special order occurs when a customer requests a one-time order at a reduction in the sales price.
Which of the following is a TRUE statement about a special order?
A) A special order occurs when a customer requests continuous orders at an increase in the sales price.
B) A special order occurs when a customer requests continuous orders at a reduction i
A) existing fixed costs
Each of the following includes correct concepts a manager should consider when implementing a special order EXCEPT ________.
A) existing fixed costs
B) available capacity
C) reduced sales price can cover incremental costs of filling order
D) extra fixed c
contains NO allocation of common fixed costs on the statement
A segment margin income statement ________.
B) Outsourcing can be a lower cost alternative.
Which of the following is NOT a potential drawback of outsourcing?
A) A manager who engages in outsourcing loses control over quality and production scheduling.
B) Outsourcing can be a lower cost alternative.
C) A company must spend money to hire more emp
Offshoring
________ refers to a company having work performed overseas
contribution margin per unit of a constraint
Contribution margin per unit � Units per constraint = _______
C) Less competition
Which of the following is NOT a characteristic of a price-taker?
A) Product lacks uniqueness
B) Not a brand name
C) Less competition
D) Heavy competition
sunk
A(n) ________ cost includes costs that have been incurred in the past and cannot be changed.
A) A manager focuses only on relevant costs and benefits, which include costs that differ amongst alternatives and impact the future.
Which of the following is TRUE about relevant costs and information?
A) A manager focuses only on relevant costs and benefits, which include costs that differ amongst alternatives and impact the future.
B) A manager who uses relevant information understan
Segment margin income
________ refers to the result of operating income or loss for each individual product line
Unavoidable fixed costs
________ include fixed costs that continue to be incurred even if the product line is discontinued.
the price of the special order is NOT more than variable costs of the order
A special order should be rejected when ________.