Answered: ent should focus its sales and…

ent should focus its sales and production efforts on the product or products that will provide the a.lowest product costs b.highest sales revenue c.maximum contribution margin

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 15MC: When operating in a constrained environment, which products should be produced? A. products with the...

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The contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behavior
2. CVP analysis allows management to determine the relative profitability of a product by * Keeping fixed costs to an absolute minimum. Highlighting potential bottlenecks in the production process. Assigning costs to a product in a manner that maximizes the contribution margin. Determining the contribution margin O per unit and projected profits at various levels of production.
The concerns that encourage management to look at the life- cycle costing are? 1.Opportunity Costs 2.Customer Satisfaction and Customer Loyalty . 3.Repair costs, maintenance, and warranties 4.Production Costs
Knowing how costs behave to change in the level of activity is useful to management for all the following reasons except for: predicting customer demand. predicting profits as sales and production volumes change. estimating costs. changing an existing product production.
In deciding which product lines to emphasize when a production constraint exists, the company should focus on the product line that has the highest a. contribution margin per unit of product. b. contribution margin per unit of the constraint. c. profit per unit of product. d. contribution margin ratio.
To better determine profit goals, activity-based cost (ABC) accounting, which tries to identify the real costs (both variable and overhead) associated with serving each customer, is preferable to average cost accounting, which identifies the cost per unit at a certain production level. Select one: True False A
Fixed costs depend on the: Select one: a. amount of resources acquired b. amount of resources used c. volume of sales d. volume of production Which of the following types of information are used in management accounting? Select one: a. financial information b. information focused on the long term c. nonfinancial information d. All of these answers are correct The production component of the value chain refers detailed planning, engineering, and testing of products and processes. Select one: True False The general term used to identify both the tracing and the allocation of accumulated costs to a cost object is: Select one: a. conversion costing b. cost assignment c. cost tracing d. cost accumulation. Period costs: Select one: a. are treated as expenses in the period they are incurred b. are directly traceable to products c. are also referred to as manufacturing overhead costs d. include direct labor Period costs: Select one: a. are treated as expenses in the period they are incurred b.…
When pricing a product or service, managers must consider which of the following? a. Only period costs b. Only manufacturing costs c. Only variable costs d. All costs
The production manager wants to achieve real and permanently decrease in the unit cost of the product. As you are the cost accountant of the company, which of the following concepts explains about real and permeant decrease in the unit cost of the product? a. Cost estimation b. Cost analysis c. Cost control d. Cost reductio
In deciding which product lines to emphasize when a production constraint exists, the company should focus on the product line that has the highest contribution margin per unit of product. contribution margin per unit of the constraint. profit per unit of product. contribution margin ratio.
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…
1. 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 fixed, mixed, or 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…