Determine if TRUE or False 16-Special pricing orders increase operating income i

Question

Determine if TRUE or False

16-Special pricing orders increase operating income if the special price exceeds the differential costs of filling the special order.

17- Accounting firms, building contractors, and healthcare providers use process costing.

18- Indirect labor costs might include the salary of the production manager.

21- production cost report helps managers identify the costs that can be reduced in the production process.

28- Fixed cost per unit is assumed to be constant within a particular relevant range of activity.

33-If the expected accounting rate of return meets or exceeds the required rate of return, the decision rule is to not make the investment.

41- Contribution margin is the amount that contributes to covering the fixed costs and then to providing operating income.

42- Centralized operations are better for small companies due to the smaller scope of their operations.

43-A constraint is a factor that restricts the production or sale of a product, which varies from company to company.

47- In the first step in developing an activitybased costing system, the management team must think about how each activity for a product or service might be improved or whether is it necessary at all.

52-Absorption costing is required by the Generally Accepted Accounting Principles (GAAP) for financial statements issued to investors, creditors, and other external users.

53- An operational asset used for a long period of time is known as a capital asset.

54- Managers can use CVP relationships to conduct sensitivity analysis

Explanation / Answer

16) True

17) False

18) False

21) True

28) True

33) False

41) True

42) True

43) True

47) True

52) False

53) True

54) True

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