Pop Quiz Chapter 11

An important step in management's decision-making process is to determine and evaluate possible courses of action.

In making decisions, management ordinarily considers both financial and non-financial information.

In incremental analysis, total variable costs will always change under alternative courses of action, and total fixed costs will always remain constant.

Accountants are mainly involved in developing non-financial information for management's consideration in choosing among alternatives.

Decision-making involves choosing among alternative courses of action.

A special one-time order should never be accepted if the unit sales price is less than the unit variable cost.

If a company has excess capacity and present markets will not be affected, it would be profitable to accept an order at a special unit price even though the price is less than the unit variable cost to manufacture the item.

A decision whether to continue to make a product or buy it externally, depends on the external price and the amount of variable and fixed costs that can be eliminated assuming no alternative uses of resources.

An opportunity cost is the potential benefit/income obtained by using resources in an alternative course of action.

A major accounting contribution to the managerial decision-making process in evaluating possible courses of action is to..