Acc 560 Wk 6 Quiz 7

ACC 560 WK 6 Quiz 7
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1. An important step in management's decision-making process is to determine and evaluate possible courses of action.


2. In making decisions, management ordinarily considers both financial and nonfinancial information.

3. In incremental analysis, total variable costs will always change under alternative courses of action, and total fixed costs will always remain constant.

4. Accountants are mainly involved in developing nonfinancial information for management's consideration in choosing among alternatives.


5. Decision-making involves choosing among alternative courses of action.


6. Financial data are developed for a course of action under an incremental basis and then it is compared to data developed under a differential basis before a decision is made.


7. In incremental analysis, total fixed costs will always remain constant under alternative courses of action.


8. A special one-time order should never be accepted if the unit sales price is less than the unit variable cost.


9. If a company has excess capacity and present markets will not be affected, it would be profitable to accept an order at a special unit price even though the price is less than the unit variable cost to manufacture the item.


10. A company should never accept an order for its product at less than its regular sales price.


11. If a company is operating at less than capacity, the incremental costs of a special order will likely include variable manufacturing costs, but not fixed costs.

12. An incremental make-or-buy decision depends solely on which alternative is the lowest cost alternative.
13. A decision whether to continue to make a product or buy it externally depends on the external price and the amount of variable and fixed costs that can be eliminated assuming no alternative uses of resources.

14. An opportunity cost is the potential...