A number of terms and concepts from this chapter and a list of descriptions, def

Question

A number of terms and concepts from this chapter and a list of descriptions, definitions, and explanations follow. For each term listed (1-12) listed below, choose at least one corresponding item (a-p) below. Note that a single term may have more than one description and a single description may be used more than once or not at all.

Short-term management decision made using differential analysis.

Management decision in which lost revenue is compared to the reduction of costs to determine the overall effect on profit.

Exists when a company has not yet reached the limit on its resources.

Management decision in which fixed manufacturing overhead is ignored as long as there is enough excess capacity to meet the order.

Costs that can be avoided by choosing one option over another.

Management decision in which relevant costs of making a product internally are compared to the cost of purchasing that product.

Resource that is insufficient to meet the demands placed on it.

Step 3 of the management decision-making process.

A number of terms and concepts from this chapter and a list of descriptions, definitions, and explanations follow. For each term listed (1-12) listed below, choose at least one corresponding item (a-p) below. Note that a single term may have more than one description and a single description may be used more than once or not at all.

Explanation / Answer

1. Excess Capacity c 9. Opportunity Costs n 2. Identify the decision problem k 10. Keep or drop decision a / b 3. Bottleneck j 11. Full Capacity m 4. Special Order Decision a / e 12. Avoidable Costs f 5. Diffferential Cost o 6.Evaluate the costs and benefits of alernatives. p 7. Make or buy decision a / h 8. Sunk Costs d, l

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