Question 1

A widespread problem in practice is that the decision model used by managers for ________ and the model used by their superiors in ________ are different.
A)outsourcing; incremental analysis
B)outsourcing; differential analysis
C)decision making; performance evaluation
D)operational decisions; joint costing

Accepted Answer

The problem is that the decision model used by managers for decision making and the model used by their superiors in performance evaluation are different. This can cause conflicts and confusion in decision making and evaluation processes. The other options are not relevant to the stated problem.

Question 2

Melissa Company produces and sells a product that has variable costs of $8 per unit and fixed costs of $240,000 per year.If 20,000 units are produced and sold in a year,what is the cost per unit?
A)$5
B)$8
C)$12
D)$20

Accepted Answer

The answer of Melissa Company produces and sells a product...

Question 3

Future costs are relevant if they are the same under all feasible alternatives.

Accepted Answer

Future costs are relevant only if they differ between alternatives, as they can influence decision-making. If they are the same, they do not affect the choice.

Question 4

Only unit costs computed using the same level of production should be compared.

Accepted Answer

This statement is true because comparing unit costs computed using different levels of production can be misleading and inaccurate. Only when the production levels are the same, can the unit costs be accurately compared.

Question 5

Generally,companies use aggregate measures of performance when conducting performance evaluations of managers.

Accepted Answer

This is true. Companies often use aggregate measures of performance such as overall financial results or customer satisfaction ratings when evaluating the performance of managers.

Question 6

Conflicts in the decision-making process can arise when superiors evaluate a manager's performance using a model consistent with the decision model used by the manager.

Accepted Answer

Conflicts in the decision-making process often arise when there is a mismatch between the evaluation model used by superiors and the decision model used by the manager, not when they are consistent.

Question 7

Zach Company produces and sells a product that has a variable costs of $7 per unit and fixed costs of $200,000 per year.If 40,000 units are produced and sold in a year,what is the cost per unit?
A)$7
B)$10
C)$12
D)$17

Accepted Answer

The cost per unit is calculated by adding the variable cost per unit to the fixed cost per unit. The fixed cost per unit is the total fixed costs divided by the number of units produced and sold. So, $200,000 / 40,000 units = $5 per unit. Adding the variable cost of $7 per unit, the total cost per unit is $7 + $5 = $12.

Question 8

Joshua Company produces and sells a product that has variable costs of $7 per unit and fixed costs of $200,000 per year.If production increases from 20,000 units to 25,000 units,the unit cost will ________.
A)increase by $35,000
B)decrease by $2 per unit
C)decrease by $8 per unit
D)stay the same

Accepted Answer

The fixed costs are spread over more units as production increases, reducing the fixed cost per unit. The fixed cost per unit decreases from $10 ($200,000/20,000) to $8 ($200,000/25,000), resulting in a $2 decrease per unit.

Quiz 6: Relevant Information for Decision Making With a Focus

A widespread problem in practice is that the decision model used by managers for and the model used by their superiors in are different.

Melissa Company produces and sells a product that has variable costs of $8 per unit and fixed costs of $240,000 per year.If 20,000 units are produced and sold in a year,what is the cost per unit?

Future costs are relevant if they are the same under all feasible alternatives.

Only unit costs computed using the same level of production should be compared.

Generally,companies use aggregate measures of performance when conducting performance evaluations of managers.

Conflicts in the decision-making process can arise when superiors evaluate a manager's performance using a model consistent with the decision model used by the manager.

Zach Company produces and sells a product that has a variable costs of $7 per unit and fixed costs of $200,000 per year.If 40,000 units are produced and sold in a year,what is the cost per unit?

Joshua Company produces and sells a product that has variable costs of $7 per unit and fixed costs of $200,000 per year.If production increases from 20,000 units to 25,000 units,the unit cost will ________.