If you had to decide whether to continue making a component part or to begin buying the part from an overseas supplier, what quantitative and qualitative factors would influence your decision? Why do companies prepare budgets? Why do management accountants need to understand their companys strategy? Pick any large company and describe three risks that it faces and how it responds to those risks. Provide three examples of how a companys risks can influence its planning, controlling, and decision-making activities. Why do companies that implement Lean Production tend to have minimal inventories? What are the three major elements of product costs in a manufacturing company? Define the following: (a) direct materials, (b) indirect materials, (c) direct labor, (d) indirect labor, and (e) manufacturing overhead. Explain the difference between a product cost and a period cost. What effect does an increase in volume have on 1. Unit fixed costs? 2. Unit variable costs? 3. Total fixed costs? 4. Total variable costs? What is meant by an activity base when dealing with variable costs? Give several examples of activity bases. What is the major disadvantage of the high-low method? What is meant by the term least-squares regression? What is the difference between a contribution format income statement and a traditional format income statement?