Matching ​Match Each Statement with the Correct Item Below

question 138

Multiple Choice

Matching
​
Match each statement with the correct item below.
-​Make-or-buy decisions

• A)​the difference in total cost between the alternatives in a decision
• B)​determine whether or not a segment should be kept or dropped
• C)​limited resources and limited demand for each product
• D)​a specific set of procedures that produces a decision
• E)​the point at which products that have common processes and costs of production become distinguishable
• F)​method of determining the cost of a product based on the price that customers are willing to pay
• G)​decisions involving a choice between internal and external production
• H)​products that have common processes and costs of production up to a point
• I)​past costs that cannot be affected by future decisions
• J)​a percentage applied to the base cost to cover other costs plus profit
• K)​determine whether a specially priced order should be accepted or rejected
• L)​determine whether it is more profitable to process a joint product further

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Definitions:

Contribution To Overhead

The portion of revenue that exceeds direct costs and contributes to covering a company's fixed expenses.

Service Departments

Divisions within a company that support other departments but do not directly contribute to revenue generation, such as maintenance and HR.

Operating Departments

Departments within an organization directly involved in its primary revenue-generating activities.