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.

Recognize the legal implications of breaching a contract.

Understand the distinction between intellectual property and other forms of property.

Describe the requirements for an offer to be legally effective.

Explain the doctrine of contractual capacity.

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Definitions:

Primary Prevention

Strategies and actions to prevent the onset of disease or injury before it occurs, through measures such as vaccination or lifestyle changes.

Health Benefits

Advantages or positive effects that actions or policies can have on an individual's physical, mental, and social well-being.

Health Risks

Factors that increase the likelihood of developing a health disorder or disease.

Life Expectancy

The average period that a person may expect to live, often influenced by factors like genetics, lifestyle, and social conditions.