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WorksheetsQUIZ 1 (SHORT TERM DECISION MAKING)
Total questions: 10
Worksheet time: 13mins
Which of the following is NOT TRUE about relevant cost?
Relevant cost is avoidable costs.
Relevant costs is future costs.
Relevant costs is sunk costs.
The relevant cost concept is useful for eliminating extraneous information from a particular decision-making process.
A building contractor has carried out a survey with a cost of RM5,000 so that he can put in a bid to build a new factory. He has paid RM3,000 so far. Which survey costs are relevant to his bid?
RM2,000 still to pay
RM5,000 total survey cost
None
RM3,000 already paid
A supermarket is considering running a promotion on one of its washing powder brands. By doing this, it will not be able to run a campaign on its shampoo brands, which would have generated a contribution of RM50,000. What type of cost is this RM50,000?
Marginal
Direct
Indirect
Opportunity
To complete an order for making curtains, Rosa will need to employ three seamstresses for two days at rm30 per day. It will also take five hours of her time, which she costs out at rm10 per hour. She will receive rm500 and have to buy materials of rm220. If she accepts this order, she will have to turn down another order, which would have generated a contribution of $80. How much contribution will she make?
RM100
RM30
NONE
RM60
A clothing company produces wool jumpers. If wool is limited, in what order should these jumpers be produced to maximize the company's profits?
Man, woman, child
Woman, child, man
Child, woman, man
Woman, man, child
The decision-making process requires......
analysis of the most recent income statement of the business
a disregard of non-relevant costs
a disregard of forecasts
the use of large amounts of historical data
An opportunity cost is the cost of.......
unplanned new business
lost business
lost business obtaining new business opportunities
the next best alternative course of action
Which of the following costs is not relevant when considering the closure of a department within a factory?
direct labour
direct materials
fixed overheads
variable overheads
In a make versus buy decision which of the following factors is not relevant?
reliability of supplier
reliability of bought-in products
fixed production costs
opportunity cost of alternative activities
When deciding to accept a special order at below the normal selling price a firm would consider which cost?
Full cost
Marginal cost
Overhead cost
Absorption cost
