When a company considers accepting an order for additional units

Question # 00293352 Posted By: solutionshere Updated on: 05/22/2016 05:41 PM Due on: 06/21/2016
Subject Accounting Topic Accounting Tutorials:
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could you please help me these question True or False:

  1. 1. When a company considers accepting an order for additional units that will not reduce its normal sales activity, the order should be accepted only if the revenue from the sale exceeds the average cost of producing the product.(True or False)
  2. 2. A company should always purchase components of its product if the purchase Price is less that the incremental costs of making those components.(True or False)
  3. 3. Assets historical costs are sunk costs and are irrelevant to decisions about what to do with those assets in the future. (True or False)
  4. 4. If a company decides to make a component instead of buying it, an opportunity.Cost is incurred equal to the net value of the products that could have been produced with the capacity committed to making the component. (True or False)
  5. 5. In selecting a sales mix, management needs to have good measures of the Company’s production and market constraints and contribution margins generated

By it’s products. (True or False)

6. When a department’s elimination is being considered, its revenues should be compared with its avoidable expenses. (True or False)

7. Management should always rely only on historical costs when determining whether to accept or reject a new order. (True or False)

8. When making decisions concerning scrap or rework, management should recognize that costs already incurred are entirely irrelevant. (True or False)

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Tutorials for this Question
  1. Tutorial # 00288684 Posted By: solutionshere Posted on: 05/22/2016 05:41 PM
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    the order should be accepted ...
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