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Homework answers / question archive / 1)In making an outsourcing decision to buy rather than make a product component, fixed manufacturing costs on factory space that has no other use are considered relevant to the decision
1)In making an outsourcing decision to buy rather than make a product component, fixed manufacturing costs on factory space that has no other use are considered relevant to the decision.
Group of answer choices
True
False
2)
The objective of sales mix decision analysis (assuming a constraint on resources) is to select the alternative that maximizes contribution margin per constrained resource.
Group of answer choices
True
False
3)
Percentage differences from budget are often more useful in performance evaluation than dollar amounts; many managers would consider a five percent variance from budget not excessive.
Group of answer choices
True
False
4)
A report to be used in performance evaluation of a subunit manager should contain only cost or revenue items that the subunit manager can control.
Group of answer choices
True
False
5)
Ignoring qualitative considerations, a company segment whose segment margin is constantly negative should be dropped.
Group of answer choices
True
False
1) true
In making an outsourcing decision to buy rather than make a product component, fixed manufacturing costs on factory space that has no other use are considered relevant to the decision . fixed costs that have no other use rather than the current production decision , is relevant because it is related only to that particular product.it is not a general fixed costs . so it should be considered as relevant cost .
2) true
The objective of sales mix decision analysis (assuming a constraint on resources) is to select the alternative that maximizes contribution margin per constrained resource.because constrained resource is considered as the bottleneck in the production . the resource is scarce , so the company should make optimum utilisation of the available resources to maximise the sales income through proper sales mix by properly allocating the constrained resource according to their conribution margin
3) false
whether the difference is presented in percentage or dollar form , it does not make the performance evaluation more useful . it depends on the difference and not on the form that is used to represent the difference . even though using dollar amount will be more appropriate because percentage form may not give an exact idea of how much of the difference is actually occured .
4) true
A report to be used in performance evaluation of a subunit manager should contain cost or revenue items that the subunit manager can control.a performance evaluation should always consider the factors that are controllable by the manager . uncontrollable factors should be avoided as they are beyond the scope / non controllable by the manager or the company.they are the external factors like changes in economic cycle , market changes etc..
5) false
eventhough the segment margin is constantly negative , while considering the company as a whole , that particular segment may have helped the company to increase the profit by cost savings such as by taking in-house making decisions .a segment should not be dropped considering only the segment profit.the whole company profit should be considered before dropping the segment .
