An accounting information system should be designed to provide information that is useful. To be useful the information must be:

Select one:

a. qualitative rather than quantitative.

b. unique and unavailable through other sources.

c. historical in nature and not purport to predict the future.

d. marginal between two alternatives.

e. relevant, accurate, and timely.

Question 2

A trade-off in a decision situation sometimes occurs between information:

Select one:

a. accuracy and relevance.

b. relevance and uniqueness.

c. accuracy and timeliness.

d. sensitivity and accuracy.

e. sensitivity and relevance.

Question 3

Which of the following costs can be ignored when making a decision?

Select one:

a. Opportunity costs.

b. Differential costs.

c. Sunk costs.

d. Relevant costs.

e. All future costs.

Question 4

The City of Miami is about to replace an old fire truck with a new vehicle in an effort to save maintenance and other operating costs. Which of the following items, all related to the transaction, would not be considered in the decision?

Select one:

a. Purchase price of the new vehicle.

b. Purchase price of the old vehicle.

c. Savings in operating costs as a result of the new vehicle.

d. Proceeds from disposal of the old vehicle.

e. Future depreciation on the new vehicle.

Question 5

Gorski Corporation manufactures parts that are used in the production of washers and dryers. The following costs are associated with part no. 65: The company received a special-order inquiry from an appliance manufacturer in Spain for 15,000 units of part no. 65. Only $3 of fixed manufacturing will be incurred on the order, and the variable selling costs per unit will amount to only $5. Since Gorski has excess capacity, the minimum price that Gorski should charge the Spanish manufacturer is:

Select one:

a. $96.

b. $99.

c. $105.

d. $108.

e. some other amount.