Matching ​Match Each Statement with the Correct Item Below

question 32

Multiple Choice

Matching
​
Match each statement with the correct item below.
-​Joint products

• 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:

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.

Leeway

The amount of freedom to move or act that is available; in finance, it often refers to the flexibility allowed in making investment decisions or adjustments.

Earnings Management

The practice of using flexibility in accounting rules to manipulate the apparent profitability of the firm.

P/E Ratios

Price-to-Earnings Ratio, a valuation metric that compares the price of a stock to the company’s earnings per share, indicating how much investors are willing to pay per dollar of earnings.