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Log in through your institution journal article The Accounting Review Vol. 46, No. 4 (Oct., 1971) , pp. 746-755 (10 pages) Published By: American Accounting Association https://www.jstor.org/stable/244253 Read and download Log in through your school or library Subscribe to JPASS Unlimited reading + 10 downloads Journal Information The Accounting Review is the premier journal for publishing articles reporting the results of accounting research and explaining and illustrating related research methodology. The scope of acceptable articles embraces any research methodology and any accounting-related subject. The primary criterion for publication in The Accounting Review is the significance of the contribution an article makes to the literature. Publisher Information The American Accounting Association is the world's largest association of accounting and business educators, researchers, and interested practitioners. A worldwide organization, the AAA promotes education, research, service, and interaction between education and practice. Formed in 1916 as the American Association of University Instructors in Accounting, the association began publishing the first of its ten journals, The Accounting Review, in 1925. Ten years later, in 1935, the association changed its name to become the American Accounting Association. The AAA now extends far beyond accounting, with 14 Sections addressing such issues as Information Systems, Artificial Intelligence/Expert Systems, Public Interest, Auditing, taxation (the American Taxation Association is a Section of the AAA), International Accounting, and Teaching and Curriculum. About 30% of AAA members live and work outside the United States. Rights & Usage This item is part of a JSTOR Collection. a.Inventory is evil and should never be kept.b.Inventory is important to keep immediately before a bottleneck process.c.Inventory should be kept before every machining process to prevent any downtime.d.None of the above are true.c 24. Which of the following cost-classification schemes is most relevant to decision making?a. Fixed--variable.b. Joint--commonc. Avoidable--unavoidable.d. Direct--common.d 25. Which of the following is NOT relevant in deciding whether to process a joint product beyond its split-offpoint?a. The split-off value.b. The price after additional processing.c. The cost of further processing.d. The cost of operating the joint process.c 26. Benson Company has 200 units of an obsolete part. The variable cost to produce them was $4 per unit. Theycould now be sold for $3 each and it would cost $6 to make them now. The parts could be reworked for $8each and sold for $17. What is the monetary advantage of reworking the parts over the next-best action?a.$600.b.$1,000.c.$1,200.d.$2,000.b 27. Pueblo Company sells a product for $60. Variable cost is $32. Pueblo could accept a special order for 1,000units at $46. If Pueblo accepted the order, how many units could it lose at the regular price before thedecision became unwise?a. 1,000.b. 500.c. 200.d. 0.c 28. Which of the following is NOT a short-term decision?a. Accept a special order.b. Make-or-buy a component.c. Replace a machine.d. Sell a joint product at split-off or process it further.d 29. The variable cost of a unit of product made yesterday isa. an incremental cost.b. an opportunity cost.c. a differential cost.d. a sunk cost.d 30. The most profitable use of a resource that has limited capacity and is needed in the production of more thanone product is a function of which of the following?a. The number of units of each product the company can sell.b. The contribution margin of each product.c. The amount of resource-use required for each unit of each product.d. All of the above.59 Which of the following is not relevant in deciding whether to process a joint product beyond its splitQuestion: Joint costs are not relevant to the decision to sell a product at the split-off point or to process the product further.
Which of the following is not considered in sell or process further decision making analysis?The correct option is: c) Fixed costs
In simple instances, fixed costs are not involved in the business decisions because they are not relevant for the incremental analysis, production decision, and other cost-related decisions.
Which of the following cost is not relevant for decision making?1. Sunk costs (past costs) or committed costs are not relevant. Sunk, or past, costs are monies already spent or money that is already contracted to be spent. A decision on whether or not a new endeavour is started will have no effect on this cash flow, so sunk costs cannot be relevant.
Which of the following must be considered in determining the relevance of a particular cost to a decision?Therefore, the relevance of cost is determined by its potential effect(s) on the decision.
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Which of the following is not relevant in deciding whether to process a joint product beyond its split off point?
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