What behavioral tendency do people often exhibit with regard to opportunity costs?

Q: How does the lower of cost or market relate to profit margins?

A: Answer: The lower cost or market implies that, depending on how historical costs and market costs…

Q: Explain the difference between price-takers and price-setters.

A: When a company cannot dictate prices then it is known as price taker. On the contrary, when a…

Q: What is Principle of Unequal Cost and who advocated the principle?

A: The basic principle of unequal cost can be described simply as "buying cheap and selling dear". In…

Q: What is meant by relevant costs and there use in making short-term decisions?

A: Cost refers to the amount of expenditure incurred by an individual or an entity in relation to goods…

Q: What is the economic rationale for the cost approach? Under what conditions would the cost approach…

A: Answer: Economic rationale for cost approach: The cost approach means that the person who is…

Q: What is the total cost of a strategy of chase demand by hiring and firing?

A: $215,000 is the total cost of  a strategy of chase demand by hiring and firing.

Q: how present value is useful in economic decision making

A: Present value (PV) is the current value of a future sum of money or a stream of cash flows, given a…

Q: Why is the basic earning power ratio useful?

A: Basic earning power ratio shows the relationship between earnings before interest and taxes and…

Q: What questions should managers answer when considering selling a product as is or processing…

A: Sell or process further decision rule: Sell or process further decision rule states that "if the…

Q: What is opportunity cost rate?

A: The opportunity cost is the cost of the option or alternative missed due to the acceptance of the…

Q: What is return on investment, and how is it calculated?

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Define the term “opportunity cost.” How may this cost be relevant in a make-or-buy decision?

A: Cost is defined as the total amount of money spent by the company for the production or creation of…

Q: What variable affecting gross profit should the manager focus his attention? Why?

A: Gross Profit is the profit arrived at by deducting cost of goods sold from the turnover or the…

Q: What questions should managers answer when considering special pricing orders?

A: Definition:   Special Pricing: When businesses get Special orders from its customers for bulk…

Q: Why opportunity cost is measured and relate with the evaluation of alternative, can it be an…

A: Cost or expenditure is the total amount spent by an individual, group and company to make a finished…

Q: According to our authors, explain the concept of “lower-of-cost-or-market.”

A: When a company prepares its financial statement, it reports certain items in the financial statement…

Q: How does opportunity cost enter into a make or buy decision?

A: Opportunity Cost:   Opportunity Cost is the future capacity or potential advantage that can be…

Q: Why base measurement on historical costs?

A: Historical cost:   Historical cost explains that assets and liabilities appear in the financial…

Q: What are the advantages and disadvantages of target pricing versus cost-based pricing?

A: Advantages of target pricing are as follows: It help in controlling in cost It provide profit with…

Q: Which of the following costs are irrelevant to business decisions? Avoidable costs Costs that…

A: Sunk costs are irrelevant to business decisions.

Q: In your own words, explain what differential costs mean. How are fixed costs and variable costs…

A: The cost can be classified on the basis of nature variable or fixed. The variable cost are directly…

Q: Why is an incremental analysis necessary when conducting a rate of return analysis for cost…

A: Incremental analysis considers only the relevant cash flows and it does not consider the…

Q: Why do managers need to know the cost of their products?

A: Job order costing: Job order costing is one of the methods of cost accounting under which cost is…

Q: What is target profit?

A: Target costing:   Target costing is a business procedure that targets the cost at the earliest…

Q: How should managers consider income tax issues when choosing a transfer-pricing method?

A:

Q: What is the perform

A: one of the objectives of transfer pricing is to performance evaluation and improve the same . fair…

Q: What questions should managers answer when setting regular prices?

A: Following are the major factors which managers should answer when the regular prices are fixed:…

Q: Define competitive disadvantage costs.

A:

Q: cost benefit model

A: The benefit under the cost-benefit model is calculated by deducting the associated cost from the…

Q: How is cost-volume-profit analysis different from profit planning?

A: Cost Volume Profit Analysis - This is an Analysis which provides the details How it will Effect the…

Q: Which of the following costs can be ignored when making a decision? a. Opportunity costs. b.…

A: Sunk cost can be ignored when making a decision. It is irrelevant cost for decision making.  Sunk…

Q: What are the critical differences between social cost benefit analysis (SCBA) and economic cost…

A: Social Cost Benefit Analysis : Meaning - It tend to analyse operational costs or the project costs…

Q: How do you calculate Benefit Cost Ratio (BCR). Mention the decision making process of BCR

A: The present value of the benefit is divided by the cost and investment in order to calculate the…

Q: How does discretionary income affect your choices for wants and needs?

A: Discretionary Income is the remaining income of the individual after deducting all necessary…

Q: Why might a manager exhibit a behavioral tendency to inappropriately consider sunk costs in making a…

A: Sunk Costs: Sunk costs are those costs incurred in the past and it cannot be changed unless if any…

Q: what is earning forecasting?

A: The act or process of using certain data to predict future earnings of a publicly-traded company.…

Q: What questions should managers answer when considering dropping a product or segment?

A: Drop or Keep Decision: When a product or segment of a business is costing more money than earning,…

Q: hould the costs be historical (embedded)costs or new (marginal) costs?

A: Historical cost is the original cost at which an asset was purchased by corporation and used in the…

Q: _______________ are the costs associated with not choosing the other alternative Sunk costs

A: Relevant costs: These are  the costs which are  relevant to a decision