Knowledge Check 01 The potential benefit that is given up when one alternative is selected over another is called relevant cost avoidable cost differential cost opportunity cost Knowledge Check 01 Which of the following types of decisions involves deciding whether to accept or reject an order that is outside the scope of normal sales? Make or buy OSpecial order Sell or process further Keep or drop Knowledge Check 01 Prairie, Inc. produces a single product. It has an annual capacity of 10,000 units, but currently uses only 80% of it. Each unit is sold for $50 and requires direct material worth $30 and direct labor worth $5 Manufacturing overhead cost is $10 per unit of which 70% is variable. What is Prairie's total incremental cost incurred to produce each unit? $30 $42 O $35 $45 Knowledge Check 01 When a company does not have enough capacity to produce all of the products and sales volume demanded by their customers, this leads to keep or drop decisions Ovolume trade-off decisions sell or process further decisions make or buy decisions Knowledge Check 01 Product A Product B $ 15 Selling price per unit Variable cost per unit 20 12 9 S 8 6 Contribution margin per unit 4 minutes 2 Minutes Labor time Roberto, Inc. manufactures products A and B. Both products have a contribution margin ratio of 40% What is the contribution margin per unit of the constrained resource for product B, if labor time is the constrained resource? O $2 per minute $3 per minute $6 per minute $8 per minute