Louisiana State University/ Accounting 2101 - Chapter 7. Questions with Answers.
Chap 07
1.Which of the following is not a step in the managerial
... [Show More] decision-making process?
A. Identify the decision problem
B. Calculate the payback period
C. Determine the decision alternatives
D. Evaluate the costs and benefits of the alternatives
2.Which of the following steps in the managerial decision-making process involves differential analysis?
A. Identify the decision problem
B. Determine the decision alternatives
C. Evaluate the costs and benefits of the alternatives
D. Make the decision
3.Which of the following is not a step in the managerial decision-making process?
A. Identify the activity cost drivers.
B. Review the results of the decision-making process.
C. Determine the alternatives.
D. Evaluate the costs and benefits of the alternatives.
4.Which of the following is not a step in the managerial decision-making process?
A. Identify the decision problem
B. Review the results of the decision-making process
C. Determine the decision alternatives
D. Forecast the potential sales
5.Which of the following is not a step in the managerial decision-making process?
A. Identify the decision problem
B. Review the results of the decision-making process
C. Choose the appropriate hurdle rate
D. Evaluate the costs and benefits of the alternatives
6.Which of the following is not another term for relevant costs?
A. differential costs
B. incremental costs
C. opportunity costs
D. avoidable costs
7. Costs that change across decision alternatives are
A. accounting costs.
B. activity-based costs.
C. differential costs.
D. capital costs.
8. A relevant cost is
A. the foregone benefit of choosing to do one thing instead of another.
B. a cost that differs across decision alternatives.
C. a cost that has already been incurred.
D. a cost that is the same regardless of the alternative the manager chooses.
9.Which of the following statements is false?
A. Sunk costs are never relevant.
B. Sunk costs are costs that occurred in the past.
C. To be relevant, a cost must be an opportunity cost.
D. To be relevant, a cost must occur in the future.
10. The manager of Hampton, Inc. is trying to decide whether to make or buy a component of the product
it sells. Which of the following costs and benefits is not relevant to the decision?
A. Direct labor cost involved in making the component
B. The purchase price of the component if it is bought
C. Variable manufacturing overhead involved in making the component [Show Less]