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Management Accounting Study Set 6

Business

Quiz 11 :

Relevant Costs for Decision Making

Quiz 11 :

Relevant Costs for Decision Making

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Non routine operating decisions focus on making use of existing capacity.
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True False
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Answer:

True

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It is usually necessary to trade-off between qualitative and quantitative factors.
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True False
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Answer:

True

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The first step in the relevant analysis technique is to identify input variables.
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True False
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Answer:

True

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Qualitative analysis aims to identify how the organisation's debt ratio will change as a consequence of the decision to be made.
True False
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Because non-routine operating decisions are common, managers use a standard decision process for addressing them.
True False
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An opportunity cost is the benefit foregone when one alternative is chosen over the next best alternative.
True False
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Positive financial outcomes should always override qualitative factors.
True False
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Ethical standards are not a factor in non-routine operating decisions.
True False
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Existing variable costs are irrelevant in special order decisions.
True False
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An example of a non-routine operating decisions is whether to sell or process further.
True False
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Analysing the impact of the decision on quality is an example of considering qualitative factors.
True False
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The process for making non-routine operating decisions starts with special orders.
True False
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Relevant costs/revenues are those that arise in the future and vary with the action taken.
True False
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Make or buy decisions refer to choosing between outsourcing or utilising internal resources.
True False
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Non-routine operating decisions are often tactical decisions.
True False
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Types of qualitative analysis include CVP and regression.
True False
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The effect of production practices on the customer quality is an example of a qualitative factor to be considered in a non-routine operating decision.
True False
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The purpose of strategic decisions is to enhance the organisations' competitive advantage.
True False
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Strategic decisions do not include decisions that impact beyond the current accounting period.
True False
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Direct fixed costs are irrelevant in outsourcing decisions.
True False
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