A decrease in the sales of a current project because of the launching of a new project is O A. irrelevant to the investment decision. OB. an overhead expense. OC. a sunk cost. D. cannibalization.
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- Which of the following would be considered a sunk cost? a. purchase price of new equipment b. warehouse lease expense c. equipment rental for the production area d. net book value of equipment that has no market valueOver-applied FOH will result if: a. FOH costs incurred is less than FOH costs charged to production b. FOH costs incurred is greater than estimated FOH costs c. FOH costs incurred is greater than FOH costs charged to production d. The plant is operating at less than expected capacity.Which of the following would be an argument for using the gross cost of plant and equipment as part of operating assets in return on investment computations? It eliminates the age of equipment as a factor in ROI computations. It is consistent with the computation of net operating income, which includes depreciation as an operating expense. It discourages the replacement of old, worn-out equipment because of the dramatic, adverse effect on ROI. It is consistent with the balance sheet
- TRUE OR FALSE a, A cost that is traceable to a segment through activity-based costing is always an avoidable cost for decision making. b. One way to increase the effective utilization of a bottleneck is to reduce the number of defective units. c. Two or more products that are produced from a common input are known as joint products. d. If the salvage value of equipment at the end of a project is highly uncertain, the salvage value should be ignored in capital budgeting decisions. - e. A cost that is traceable to a segment through activity-based costing is always an avoidable cost for decision making. f. Eliminating nonproductive processing time is particularly important in a bottleneck operation. g. In a decision to drop a product, the product should be charged for rent in proportion to the space it occupies even if the space has no alternative use and the rental payment is unavoidable.TRUE OR FALSE a, A cost that is traceable to a segment through activity-based costing is always an avoidable cost for decision making. b. One way to increase the effective utilization of a bottleneck is to reduce the number of defective units. c. Two or more products that are produced from a common input are known as joint products. d. If the salvage value of equipment at the end of a project is highly uncertain, the salvage value should be ignored in capital budgeting decisions. - e. A cost that is traceable to a segment through activity-based costing is always an avoidable cost for decision making. f. Eliminating nonproductive processing time is particularly important in a bottleneck operation. g. In a decision to drop a product, the product should be charged for rent in proportion to the space it occupies even if the space has no alternative use and the rental payment is unavoidable. PLEASE ANSWER D,E,F,GA cost that cannot be changed because it arises from a past decision and is irrelevant to future decisions is a. An uncontrollable cost. d. An opportunity cost. b. An out-of-pocket cost. e. An incremental cost. c. A sunk cost.
- A unique feature of the analysis of a replacement decision is that Group of answer choices a. the analysis considers total rather than differential costs. b. the amount used as the cost of the investment is not likely to equal the price to be paid for the new asset. c. the time value of money is ignored. d. such decisions seldom involve cash flows.Which of the following would be an argument for using the gross cost of plant and equipment as part of operating assets in return on investment computations? Multiple Choice It discourages the replacement of old, worn-out equipment because of the dramatic, adverse effect on ROI. It is consistent with the balance sheet presentation of plant and equipment. It eliminates the age of equipment as a factor in ROI computations. It is consistent with the computation of net operating income, which includes depreciation as an operating expense.increase in warehouse costs and (or) transportation costs? Group of answer choices A) Higher Dollar Value of products B) Greater risk of damage to products C) Special handling requirements D) Only A and B are correct answers E) All A, B, and C are correct answers
- A cost that has been incurred in the past, cannot be recouped, and is not relevant to future decisions is termed a a. period cost b. replacement cost c. sunk cost d. differential costWhich 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 productionThe following is a disadvantage of ARR investment appraisal method (select one): A. multiple or no solutions B. does not take into account time value of money C. easy to explain D. management performance is rarely evaluated based on ARR
