Future costs that differ across alternatives are
relevant costs.
variable costs.
sunk costs.
opportunity costs.
relevant costs
Depreciation is a _____, a cost that cannot be affected by any future action.
relevant cost
mixed cost
sunk cost
opportunity cost
Sunk cost
The correct order of six-step outline of a decision-making model is
Define the problem, Identify alternatives, Identify the costs and benefits associated with each alternative, Estimate the relevant costs and benefits for each alternative, Assess qualitative factors, and Make the decision
Qualitative factors that should be considered when evaluating a make-or-buy decision are
whether the outside supplier can provide the needed quantities.
whether the outside supplier can provide the product when it is needed.
All of these.
the quality of t
All of these
Which of the following is true of budgeting?
Budgeting forces management to plan for the future.
Budgeting creates a plan of action only in terms of production units.
Budgeting eradicates the need for keeping a buffer against uncertainties in demand.
Budg
Budgeting forces management to plan for the future
Which of the following is a use of budgets for control?
Plans can be made for the future.
If conditions change between the formation of the budget and the current time, budgets can be quickly adapted.
Budgets set a standard against which results can be co
Budgets set a standard against which results can be compared
The first step in creating the master budget is the creation of the
production budget.
direct labor budget.
cash budget.
sales budget.
budgeted income statement.
Sales Budget
Which of the following is true of a static budget?
A static budget represents certain goals that a firm wants to achieve.
It is best used to create a meaningful performance report.
It divides costs into those that vary with units of production and those t
A static budget represents certain goals that firm wants to achieve
Which of the following is true of budgetary slack?
Budgetary slack occurs when a manager deliberately underestimates revenues or overestimates costs in order to make budgeted expectations more easily achievable in the future.
Budgetary slack occurs when t
Budgetary slack occurs when a manager deliberately underestimates revenues or overestimates costs in order to make budgeted expectations more easily achievable in the future.
Which of the following is true of myopic behavior?
Increased spending on research and development is a possible example of myopic behavior.
Budgetary measures alone can prevent myopic behavior.
Short-term nonfinancial measures contain myopic behavior.
It
It occurs when a manager takes actions that improve budgetary performance in the short run but bring long-run harm to the firm.