chapter 19 and 20

Question 1

tactical decisions

Answer 1

decisions that do not require large increases or decreases in capacity related resources and can be changed or reversed quickly

Question 2

long term decisions

Answer 2

decisions that tend to be more strategic in nature and involve large increases/decreases in capacity related resources

Question 3

relevant information for decision making

Answer 3

relevant information changes for the decision that is being made

Question 4

sunk costs

Answer 4

costs that have already been incurred and are irrelevant to any future decisions
irrelevant as they can not be changed

Question 5

opportunity costs

Answer 5

the potential benefit given up when the choice of one action precludes a different action

Question 6

deleting a department

Answer 6

involved considering which costs and benefits will disappear if the decision is made

Question 7

adding a department

Answer 7

involves considering which costs and benefits will increase if the decision is made

Question 8

Allocated joint processing costs

Answer 8

these costs are not relevant in choosing whether to sell or develop further as they occur before this decision and effectively are sunk costs as you can no go back

Question 9

contribution per scarce resource

Answer 9

determines the contribution in relation to a unit of a scarce resource

Question 10

product mix

Answer 10

determining the most appropriate range of production to offer customers

Question 11

long term

Answer 11

fixed costs become important, in the long run fixed costs can be altered

Question 12

short term

Answer 12

focus more on limited resources and how these impacts the firm from meeting targets