Question 5. Question : A useful device for solving production
problems involving
multiple products and limited resources is:
Student Answer:
Gross profit per unit of product.
Contribution per unit of scarce resource.
Value-stream costing.
Relevant cost pricing.
The contribution income statement.
Question 6. Question : Relevant costs for a make-or-buy
decision for a component part
include all of the following EXCEPT:
Student Answer:
Fixed salaries that will not be incurred if the part is
outsourced.
Payroll tax (unemployment insurance cost), because of
outsourcing.
Material-handling costs that can be eliminated if the part is
outsourced.
Special machinery for the part that has no resale value.