5 easy managerial questions

In a make or buy decision, the costs involved in buying will include: a) The charge from the vendor, plus the depreciation of any equipment you were unable to sell when making the change from making to buying. Ob) All of your manufacturing overhead, since it did not change when you decided to buy Oc) The charge from the vendor for the product. d) None of the above, A special order request for 20,000 widgets just showed up on your desk. The customer has asked for special engraving, at an additional cost of $1 per widget. They are also asking for a 20% discount on your regular price of $10 (so they want to pay $8 per widget). If you have some idle production space, and this job would net $5,000 after all expenses, do you take the special order? a) Yes, since the customer is a close friend of CEO, we should take the special order for a job security. b) No, since they are asking for a discount, plus there is an additional engraving cost, we will not take the special order. c) No, since they are asking for a discount and require additional engraving cost, we will use the idle time to build up inventory of our regular priced widget and turn down the special order. d) Yes, since it will show a net profit and we have the idle capacity, we will take the special order. The costs and revenues that remain constant in all decision scenarios are: a) Relevant costs and revenues b) Opportunity costs and irrelevant revenues. c) Differential costs and revenues d) Unavoidable costs and irrelevant revenues. Farmer Jane is considering expanding her apple orchard. Last year, she already purchased the land and planting equipment for the expansion. The relevant costs in her decision may include. a) The direct labor, materials, and unavoidable fixed overhead related to the expansion. b) The direct labor, materials, and variable overhead directly related to adding more apple trees to her orchard. c) The direct labor, materials, and land purchase to expand her orchard. d) The direct labor, materials, and depreciation on the equipment related to the expansion You have the opportunity to fly to your vacation destination for $500 or you could drive for $100. From a qualitative perspective, what might you consider? O a) Flying will get you there quicker, so you have more time to sightsee. b) Flying is too costly, so you should drive. Oc) Driving is cheaper, so hop in the car! d) You should pay for meals out of your pocket when you drive