Question1.To make a special order decision, managers nee

19 May Question1.To make a special order decision, managers nee

Posted at 06:41h in 2General studies by Past Papers

Question

1.To make a special order decision, managers need critical information about all the following except: (Points : 2)

Relevant costs.

Prior period operating costs.

Any opportunity costs.

The strategic, competitive environment of the firm.

2.The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is: (Points : 2)

The variable manufacturing cost of the component.

The total manufacturing cost of the component.

The total variable cost of the component.

The fixed manufacturing cost of the component.

Zero.

3.A truck, costing $25,000 and uninsured, was wrecked the very first day it was used. It can either be disposed of for $5,000 cash and be replaced with a similar truck costing $27,000, or rebuilt for $20,000 and be brand new as far as operating characteristics and looks are concerned. The best choice provides a net savings of: (Points : 2)

$2,000.

$5,000.

$7,000.

$12,000.

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