When Making Pricing Decisions Managers Should Include Fixed Cost Per

question 89

Multiple Choice

When making pricing decisions managers should include fixed cost per unit in the cost because ________.

• A) it leads to reporting higher operating income for the period
• B) it allows managers to report positive contribution as long as prices are above variable costs
• C) in the long run, the price of a product must exceed the full cost of the product
• D) it requires the management accountant to perform a detailed analysis of cost-behavior patterns to separate product costs into variable and fixed components

Determine the impacts of actual costs versus standard costs on production budgeting.

Identify factors affecting the predetermined overhead rate and its calculation.

Analyze the variance reports for better management decisions and its importance for internal reporting.

Recognize the components of the balanced scorecard approach and its perspective exclusion.

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Definitions:

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