question
Which of the following is NOT one of the steps in the managerial decision-making process?
answer
basing decisions on sunk costs
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2 Costs that do not differ between alternatives are ________.
answer
C) considered irrelevant to the decision
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3 When replacing an old asset with a new one, the original purchase price of the old asset represents a(n) ________ cost.
answer
sunk
question
4 Which of following statements is true of short-term decision making?
answer
A) Fixed costs and variable costs must be analyzed separately.
question
5 If a company wants to be a price-taker, which of the following strategies should be taken?
answer
A) Enter a competitive market and focus on cost cutting.
question
when are companies price takers?
answer
when they have little or no control over the prices of their products or services.
question
7) Which of the following statements describes a scenario when management should consider dropping a business division?
answer
C) The division's avoidable fixed costs are greater than its contribution margin.
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8. ________ refer to the value forgone in order to make one particular investment instead of another.
answer
opportunity costs
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9 In deciding whether to drop its electronics product line, a company's manager should ignore ________.
answer
D) the amount of unavoidable fixed costs
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10 An opportunity cost is ________.
answer
C) the benefit given up by choosing an alternative course of action
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