QUIZZIZ BHIE- SECOND YEAR

Opportunity cost is an important concept in decision-making. This may be described as

• the difference in total costs between two choices

• the contribution to income that is forgone by not using limited resources in its best alternative use

• a cost that may arise in the future

• a cost that has already been incurred

Linear programming is best used most commonly to determine the

• fastest timing

• most advantageous price

• best use of scarce resources

• mix of variables that will result in the largest quantity

It involves a systematic examination of the relationships among cost, cost driver, and profit.

• financial statement analysis

• cost-benefit analysis

• cost-volume-profit analysis

• profit planning

The elements of CVP analysis include the following except

• total fixed cost

• unit of variable cost

• volume or number of units

• relevant costs

Linear programming models are mathematical techniques in which an objective function is maximized or minimized subject to constraints. These constraints must be fully specified before a linear programming problem can be solved and generally described:

• costs

• inefficiencies

• resources

• dependent variables

It is the excess of sales price over the related variable cost, contributing to the recovery of fixed expenses.

• gross margin

• contribution margin

• margin of safety

• profit

Every real-life decision situation may be modeled mathematically under certain assumptions and a deterministic solution may be achieved.

• true

• partly true

• false

• partly false

In applying quantitative methods, behavioral issues should never be taken into account.

• true

• partly true

• false

• partly false

Decision-making process includes identifying alternatives, determining criteria, and evaluating alternatives.

• partly true

• true

• false

• partly false

At break-even, profit equal to zero.

• True

• False