The best objective when faced with limited resources is to maximize:     production of the product with the highest selling price.     production of the product with the highest customer demand.     the contribution margin per unit of the constraining resource.     the gross profit per unit of the constraining resource.

Which of the following costs are always incremental and relevant in decision analysis?       a)  Opportunity costs and sunk costs   b)  Avoidable costs and opportunity costs   c)  Only avoidable costs   d)  Avoidable costs and sunk costs   Which of the following will increase a company's breakeven point?       a)  reducing its total fixed costs   b)  increasing the selling price per unit   c)  increasing variable cost per unit   d)  increasing contribution margin per unit

Mastery Problem: Contribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable and Mixed Costs An appreciation of cost behavior is needed in order for management to understand and predict profitability as the costs of material, labor and other operating expenses and levels of production and sales change. It's important to review the cost behavior of fixed, variable and mixed costs before contribution margins, cost-volume-profit analysis, and break-even points.   1.  In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing office chairs. With respect to the production and sale of office chairs, classify each cost as: a.fixed b.mixed c.variable.   a.  Pressure-molded plastic for chair frames   b.  Pension cost: $0.50 per employee hour on the job   c.  Insurance premiums for inventory: $2,100 per month plus $0.01 for each dollar of inventory over $2 million   d.  Property taxes: $120,000 per year for…

Question 27

QUESTION 28 Which of the following is not a reason for cost allocation?   A. Maximization of direct cost efficiency   B. Cost-based reimbursement   C. Cost determination of product or service   D. Cross-department monitoring