Chapter 17

Question 1

Activity resource usage model

Answer 1

a model that classifies resources according to their nature, which allows the assessment of changes in resource supply (and thus resource spending) as activity demand for the resource changes.

Question 2

Decision model

Answer 2

a set of procedures that, if followed, will lead to a decision.

Question 3

Foreign trade zones (FTZs)

Answer 3

areas physically on U.S. soil but considered to be outside U.S. commerce. Goods imported into a foreign trade zone are duty-free until they leave the zone.

Question 4

Keep-or-drop decision

Answer 4

a relevant costing analysis that focuses on keeping or dropping a segment of a business.

Question 5

Make-or-buy decision

Answer 5

a decision that focuses on whether a component (service) should be made (provided) internally or purchased externally.

Question 6

Outsourcing

Answer 6

the payment by a company for a business function that was formerly done in-house.

Question 7

Relevant costs (revenues)

Answer 7

future costs (revenues) that differ across alternatives.

Question 8

Sell or process further

Answer 8

relevant costing analysis that focuses on whether or not a product should be processed beyond the split-off point.

Question 9

Special-order decision

Answer 9

decisions that focus on whether a specially priced order should be accepted or rejected.

Question 10

Sunk cost

Answer 10

a past cost—a cost already incurred.

Question 11

Tactical cost analysis

Answer 11

the use of relevant cost data to identify the alternative that provides the greatest benefit to the organization.

Question 12

Tactical decision making

Answer 12

choosing among alternatives with only an immediate or limited end in view.

Question 13

Tariff

Answer 13

the tax on imports levied by the federal government.