I need help with a few non-required review problems. I have a midterm coming up!
ID: 2435477 • Letter: I
Question
I need help with a few non-required review problems. I have a midterm coming up! Please help!
1. Management is considering reworking some obsolete wind charms into a more marketable product. In a decision model analyzing these alternatives, an externality would be:
A. The $20,000 reworking cost.
B. The $45,000 selling price for the new wind charms.
C. The value of avoiding layoffs.
D. The $8,000 scrap value of the existing wind charms.
E. None of the above items are externalities.
2.
3.
Which of the following activities is usually considered a volume cost driver in an ABC system?
A.
Move activities
B.
Wait activities
C.
Setup activities
D.
Run activities
E.
Quality Control Activities
4. Why is plant capacity a factor in our decision to accept or not accept a special order?
None of the above is correct.
Which of the following statements about the limitations of Value Chain Analysis is false?A. Truly comparable activities may be difficult to identify. B. Information may be difficult to obtain. C. ROI (return on investment) measures are accurate measures of profitability and power. D. Measures that correlate better with firm value are needed. E. Successful differentiation and costs management will require detailed costs analysis.
Explanation / Answer
1. Management is considering reworking some obsolete wind charms into a more marketable product. In a decision model analyzing these alternatives, an externality would be: C. The value of avoiding layoffs. 2. Which of the following statements about the limitations of Value Chain Analysis is false? A. Truly comparable activities may be difficult to identify. 3. Which of the following activities is usually considered a volume cost driver in an ABC system? E. Quality Control Activities 4. Why is plant capacity a factor in our decision to accept or not accept a special order? D. Available capacity indicates whether we must forego any normal sales.
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