For Each Item Listed, Select the Appropriate Purpose of Cost

question 23

Essay

For each item listed, select the appropriate purpose of cost allocation from the list below. A purpose may be used more than once.
1. To cost a product at a fair price for government contracts
2. To encourage simpler product design
3. To decide on an approprite selling price for a special-order product
4. To cost inventories for reporting on a company's tax return
5. To encourage the sales department to focus on high-margin products
6. To evaluate a make or buy decision
7. To cost inventories for the balance sheet
8. To decide whether to add or delete a product line
Purposes of cost allocation:
a. To provide information for economic decisions
b. To motivate managers and other employees
c. To justify costs or compute reimbursement amounts
d. To measure income and assets for reports to external parties

Understand the concept of price ceilings and their effects on markets.

Recognize the inefficiencies caused by binding price ceilings and their rationing mechanisms.

Comprehend the historical context and the impact of price ceilings, using the 1973 gasoline shortage as an example.

Identify the consequences of imposing binding price ceilings in competitive markets.

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Definitions:

Contemporary Psychology

The modern, ongoing study of the mind and behavior, incorporating the latest research and techniques.

Mental Processes

Internal cognitive operations that include thinking, perceiving, remembering, and making decisions.

Behavior

The actions or reactions of an object or organism, usually in relation to the environment.

Nature-nurture

A debate in psychology focused on the relative contributions of genetic inheritance and environmental factors to human development.