Management Accountants Are Frequently Asked to Analyze Various Decision Situations

question 135

Multiple Choice

Management accountants are frequently asked to analyze various decision situations including the following:

(1) Alternative uses of plant space, to be considered in a make/buy decision.
(2) Joint production costs incurred, to be considered in a sell-at-split-off-point-versus-process-further decision.
(3) Research and development (R&D) costs incurred in prior months, to be considered in a new-product-introduction decision.
(4) The cost of a special device that is necessary if a special sales order is accepted.
(5) The cost of obsolete inventory to be considered in a keep-versus-disposal decision.

The costs described in situations 1 and 4 above are:

• A) Prime costs.
• B) Sunk costs.
• C) Discretionary costs.
• D) Relevant costs.
• E) Fully-absorbed costs.

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Definitions:

Blood Pressure

The force exerted by circulating blood on the walls of blood vessels, a critical measure of cardiovascular function and health.

Prehypertension

A condition where blood pressure is higher than normal but not yet high enough to be classified as hypertension, indicating an increased risk of developing high blood pressure.

Blood Pressure

The force exerted by circulating blood on the walls of blood vessels, crucial for maintaining bodily functions.

African Americans

A demographic group in the U.S. identified by their ancestral linkage to any of the black racial groups native to Africa.