FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
Choose from the dropdown given whether the associated cost or benefit is relevant/irrelevant to the related decision.
Relevant/
Decision
Cost or Benefit
Irrelevant
$300 repair bill to fix brakes.
1
Decision: Should you take the bus or drive your car to school for the semester?
Unavoidable fixed overhead.
Decision: Eliminate an unprofitable segment.
2.
3.
Decision: Make or buy a component used in manufacturing a product.
Selling price of the final product.
Variable overhead
4.
Decision: Accept a special order.
The cost of prod ucing an
unfinished and unassembled table
Decision: Sell unassembled and unfinished furniture or sell finished assembled furniture.
5
Decision: XYZ Tire Company is considering dropping one of its 10 models of tires
6
Common fixed costs.
Decision: ABC Golf Co. produces custom golf clubs and is considering purchasing the putter from a manufacturer
7.
Direct labor
of custom putters
Decision: A major regional airline has been approached to provide 200 seats at a discounted price to Tampa,
Florida, for an executive training session. The airline has excess capacity on the scheduled flight date.
Cost of flight crew.
8
Decision: A major regional airline has been approached to provide 200 seats at a discounted price to Tampa,
9.
In-flight meals.
Florida, for an executive training session. The airline has excess capacity on the scheduled flight date.
Decision: A major regional airline has been approached to provide 200 seats at a discounted price to Tampa,
10
Florida, for an executive training session. The airline does not have excess capacity on the scheduled flight date
Discounted ticket price
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Transcribed Image Text:Choose from the dropdown given whether the associated cost or benefit is relevant/irrelevant to the related decision. Relevant/ Decision Cost or Benefit Irrelevant $300 repair bill to fix brakes. 1 Decision: Should you take the bus or drive your car to school for the semester? Unavoidable fixed overhead. Decision: Eliminate an unprofitable segment. 2. 3. Decision: Make or buy a component used in manufacturing a product. Selling price of the final product. Variable overhead 4. Decision: Accept a special order. The cost of prod ucing an unfinished and unassembled table Decision: Sell unassembled and unfinished furniture or sell finished assembled furniture. 5 Decision: XYZ Tire Company is considering dropping one of its 10 models of tires 6 Common fixed costs. Decision: ABC Golf Co. produces custom golf clubs and is considering purchasing the putter from a manufacturer 7. Direct labor of custom putters Decision: A major regional airline has been approached to provide 200 seats at a discounted price to Tampa, Florida, for an executive training session. The airline has excess capacity on the scheduled flight date. Cost of flight crew. 8 Decision: A major regional airline has been approached to provide 200 seats at a discounted price to Tampa, 9. In-flight meals. Florida, for an executive training session. The airline has excess capacity on the scheduled flight date. Decision: A major regional airline has been approached to provide 200 seats at a discounted price to Tampa, 10 Florida, for an executive training session. The airline does not have excess capacity on the scheduled flight date Discounted ticket price
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