Management Accountants Are Frequently Asked to Analyze Various Decision Situations

question 66

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 versus a process-further decision.
(3) Research and development costs incurred in prior months,to be considered in a product-introduction decision.
(4) The cost of a special device that is necessary if a special order is accepted.
(5) The cost of obsolete inventory to be considered in a keep-versus-disposal decision.
The costs described in situations 2,3,and 5 above are:

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

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Definitions:

Distribution of Scores

The spread of values within a set of data, often analyzed in psychological research to understand variability within a sample.

Median

The middle value in a data set, which separates the higher half from the lower half of the data set.

Center

A focal point or hub often used for specific activities or the provision of services.

Cognitive-behavioral

A psychological approach that emphasizes the importance of thought patterns and behaviors in understanding and treating psychological disorders.