Management Accountants Are Frequently Asked to Analyze Various Decision Situations

question 78

Multiple Choice

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

● The cost of a special device that is necessary if a special order is accepted.
● The cost proposed annually for the plant service for the grounds at corporate headquarters.
● Joint production costs incurred, to be considered in a sell-or-process-further decision.
● The costs associated with alternative uses of plant space, to be considered in a make/buy decision.
● The cost of obsolete inventory acquired several years ago, to be considered in a keep-versus-disposal decision.

The costs described in situations I and IV above are examples of:

• A) Prime costs.
• B) Sunk costs.
• C) Discretionary costs.
• D) Relevant costs.
• E) Opportunity costs.

Differentiate between reasons for acquiring less than a 100% interest in a subsidiary.

Understand and apply the elimination entries for intercompany transactions.

Calculate non-controlling interest (NCI) on the consolidated statement of financial position.

Understand differences between the entity method and parent-company extension method in consolidations.

---

Definitions:

Deteriorate

The process of becoming progressively worse or declining in condition, quality, or function.

Schizophrenia

A long-term mental disorder involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception and actions.

Schizophrenia

A complex mental disorder that affects how a person thinks, feels, and behaves, often characterized by delusions, hallucinations, and disordered thinking.

Mental Health

A state of well-being in which an individual realizes their own abilities, can cope with the normal stresses of life, work productively, and is able to make contributions to their community.