Which statement is true concerning the decision rule on whether to make or buy quizlet?

CHAPTER 8

True / False

1. Decision making is choosing one alternative from among several.

a. True

b. False

ANSWER: True

2. Nonprogrammed decisions require problem solving that identifies answers to unique questions or issues.

a. True

b. False

ANSWER: True

3. Programmed decisions are common at the higher levels of the organization.

a. True

b. False

ANSWER: False

4. Decisions in organizations can be classified according to their frequency and information conditions.

a. True

b. False

ANSWER: True

5. Decision rules are used to make programmed decisions.

a. True

b. False

ANSWER: True

6. Susan's recent decision about which company her conglomerate should buy was a programmed decision.

a. True

b. False

ANSWER: False

7. A nonprogrammed decision usually recurs often enough for decision rules to be developed.

a. True

b. False

ANSWER: False

8. The decision maker who lacks enough information to estimate the probability of outcomes faces a condition of

certainty.

a. True

b. False

ANSWER: False

9. The rational decision-making process begins with the identification of a problem.

a. True

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480,000 * 70%= 336,000
300,000 * 30%=90,000
336,000 + 90,000= 426,000
426,000 + 150,000 + 72,000 + 48,000=
$696,000

150,000 * 40%=60,000
180,000 60% 50%= 54,000
150,000 60% 50%= 45,000
60,000 + 54,000 + 45,000=
$159,000

Bean Manufacturing reported the following information for 2016:

October November December
Budgeted purchases $240,000 $256,000 $288,000
Operating expenses are: Salaries, $100,000; Depreciation, $40,000; Rent, $20,000; Utilities, $28,000.
Operating expenses are paid during the month incurred.
Accounts payable is used only for inventory acquisitions.
How much is the budgeted amount of cash to be paid for operating expenses in November?

Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent:

Direct materials $8,400
Direct labor 11,250
Variable overhead 12,600
Fixed overhead 16,200

An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit. If Clemente accepts the offer, by how much will net income increase (decrease)?

A) $3,750
B) $19,950
C) $(8,850)
D) $(2,850)

Paul Bunyon Lumber Co. produces several products that can be sold at the split-off point or processed further and then sold. The following results are from a recent period:

Product, Sales Value at Split-off, Additional Variable Costs,
Sales Value after Further Processing

Green lumber $159,600 . $24,000 $178,000
Rough lumber 124,000 28,200 173,600
Sawdust 102,000 19,600 130,000

The additional profit that would result from processing rough lumber further is

A) $21,400.
B) $49,600.
C) $145,400.
D) $95,800.

Paul Bunyon Lumber Co. produces several products that can be sold at the split-off point or processed further and then sold. The following results are from a recent period:

Product, Sales Value at Split-off, Additional Variable Costs,
Sales Value after Further Processing

Green lumber $159,600 $24,000 $178,000
Rough lumber 124,000 28,200 173,600
Sawdust 102,000 19,600 130,000

What is the increase in profit if the appropriate products are processed further?
A) $24,200
B) $29,800
C) $96,000
D) $255,800

A company budgeted unit sales of 204,000 units for January, 2013 and 240,000 units for February 2013. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales. If there were 61,200 units of inventory on hand on December 31, 2012, how many units should be produced in January, 2013 in order for the company to meet its goals?

A) 214,800 units
B) 204,000 units
C) 193,200 units
D) 276,000 units

Which of the following will not affect a make or buy decision?

Which of the following costs are irrelevant to the make or buy decision?

Which of the following is not considered in sell or process further decision

Which of the following are relevant in deciding whether to eliminate an unprofitable segment?