Which of the following is NOT one of the common exit barriers? Select one: O a. A high return unit may provide input for low-return units so the firm may not like to quit high-return business. O b. Emotional attachment to the business may ruin if the company does not exit the business for sentimental reason O. The cost of exit is high. The terminal benefits of redundant workers are high O d. Investment in plant and machinery has no alternative use and cannot be sold off

Which of the following is NOT one of the common exit barriers? Select one: O a. A high return unit may provide input for low-return units so the firm may not like to quit high-return business. O b. Emotional attachment to the business may ruin if the company does not exit the business for sentimental reason O. The cost of exit is high. The terminal benefits of redundant workers are high O d. Investment in plant and machinery has no alternative use and cannot be sold off

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 8MC: Which of the following is a disadvantage of outsourcing? A. freeing up capacity B. freeing up...

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Which of the following is a disadvantage of outsourcing? A. freeing up capacity B. freeing up capital C. transferring production and technology risks D. limiting ability to upsize or downsize production
What does a consistently negative responsibility marginimply will happen to the operating income of the business ifthe center is closed? Why? Identify several other factors thatshould be considered in deciding whether or not to close thecenter.
1)What is cost behavior analysis? and Why is cost behavior analysis important to management? 2)“Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree? Agree or not agree, please describe your line of reasoning.
Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.
Why might relevant costs analysis be bad for a company if used too frequently? Multiple Choice It overemphasizes short-term goals and neglects long-term goals. It complicates the job of managers. It focuses too much on strategy and not enough on financial measures. It could lead to a permanent change in the production process of the company. It overemphasizes long-term goals and neglects short-term goals.
Which of the following is not a consideration when a manager is deciding to discontinue a product or product line? Whether the product has a positive or negative contribution margin. Determining if direct fixed costs could be avoided if the product or product line is discontinued. If discontinuing the product or product line will affect sales of remaining products. Not having any free capacity.
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A business that has a low operating leverage is considered normal for highly automated manufacturing businesses. Group of answer choices True False
2. What are some possible drawbacks to using standard costs that Sarah might consider? a. Standards limit operating improvements because employees may be discouraged from improving beyond the standards. b. Standards may become “stale” in a dynamic manufacturing environment. c. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization. d. Since standards are impossible to attain, they are a distraction from the work at hand. e. Since standards never change, they do not reflect reality. Answers a, b and c b, c and d c, d and e a, d and e b, d and e
Which one of the following statement is not correct? O Both fixed and variable costs influence short-term decision-making. O Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action. O Opportunity costs are only considered when resources are limited. O Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs.
The barrier to entry that helps increase the threat of new entrants for an incumbent firm using a cost-leadership strategy would?