The contribution margin approach helps managers in short-term decision making because itA. reports costs and revenues at present valueB. reports only mixed costsC. treats fixed manufacturing overhead as product costsD. isolates costs by behavior

The contribution margin approach helps managers in short-term decision making because it isolates…

Answered: The contribution margin approach helps…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 14MCQ

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Similar questions

What advantage does the FIFO cost method have over the average cost method relative to providing information for cost control?
Describe how total variable costs and unit variable costs behave with changes in the level of activity
When might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products?
В. Explain the following: Product costs and Period costs and one example of each. Distinguish clearly between Financial Accounting and Management Accounting under 3 (THREE) different factors, which are: i. Stakeholders, ii. Time frame and iii. Regulations. С. Before calculating costs we need to understand how different costs behave. In cost accounting we typically classify costs by three types of behaviour: Fixed costs - costs which don't change as the activity level changes Variable costs - costs which change in direct proportion to changes in the activity level Semi-variable costs- costs which have both fixed and variable elements. Explain the purpose classifying costs into the behavior patterns. D.
Which of the following statements is true of ABC systems? A) ABC systems are time-driven cost systems. B) ABC systems classify some direct costs as indirect costs and some indirect costs as direct costs. C) ABC systems provide valuable information to managers beyond accurate product costs. D) ABC systems assume all costs are variable costs.
The marginal cost is: Select one: O a. Is the incremental cost of an activity, such as producing a unit of goods or services O b. Is the cost that causes change in total cost for a cost object O c Is the span of activity levels for which the cost behaviour patterns hold O d. Is the input or activity that causes change in total cost for a cost object
1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost
Employee training is an example of discretionary fixed costs. Select one: True False Below are the measures of cost functions except: a. Regression analysis b. Engineering analysis c. Visual fit analysis d. Maintenance analysis Cost behavior is linear in nature on cost driver levels. Select one: True False Discretionary cost are the fixed cost that are able to achieve at desired level of service or production. Select one: True False Period costs are the cost identified with goods produced. Select one: True False Lease payment is the example of discretionary fixed cost. Select one: True False Below are the examples of committed costs, except: a. Mortgage payment b. Depreciation c. Tax payment d. Management salary Direct labor cost includes wages of all the labors that can be traced specifically. Select one: True False Cost are assumed to be fixed or changes within the relevant range of activity. Select one: True False
In Classification Of Cost (Marginal costs) What Is A Business Situational Example of the ff: Marginal costs Differential/Incremental costs Opportunity costs Relevant cost Replacement cost Shutdown cost Capacity cost Sunk cost
To better determine profit goals, activity-based cost (ABC) accounting, which tries to identify the real costs (both variable and overhead) associated with serving each customer, is preferable to average cost accounting, which identifies the cost per unit at a certain production level. Select one: True False A
Knowing how costs behave to change in the level of activity is useful to management for all the following reasons except for: predicting customer demand. predicting profits as sales and production volumes change. estimating costs. changing an existing product production.
When pricing a product or service, managers must consider which of the following? a. Only period costs b. Only manufacturing costs c. Only variable costs d. All costs

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The contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behavior