Various general decision rules are used for different kinds of non-routine operating decisions. The types of...

 

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Various general decision rules are used for different kinds of non-routine operating decisions. The types of non-routine operating decisions are listed on the right; decision rules are listed on the left. Match each decision rule with the appropriate decision type. Each listed item has only one correct answer. ✓ Accept if price is greater than or equal to the sum of variable costs, relevant fixed costs and opportunity costs. ✓ Drop if the contribution margin is less than the sum of relevant fixed costs and opportunity costs. Emphasize the product with the highest contribution margin per unit if resources are not constrained If resources are constrained, emphasize the product with the highest contribution margin per unit of the constrained resource. When operating with resource constraints, emphasize the product with the highest overall profit margin. ✓ Outsource if the cost to buy is greater than or equal to the sum of the variable costs and relevant fixed costs, less opportunity costs. For outsourcing decisions, the general rule is managers should choose the option with the lowest relevant cost. ✓ Keep work inside if the cost to buy is less than or equal to the sum of variable costs and relevant fixed costs. ✓ If the price is greater than or equal to the sum of variable costs and opportunity costs, accept the order A. Keep or drop business segment (drop or retain business segment decision) B. Product emphasis C. Special order D. Insource or outsource E. None of the special decision types are correct. Make the product if the cost to buy is greater than or equal to the difference between variable costs and opportunity costs. Various general decision rules are used for different kinds of non-routine operating decisions. The types of non-routine operating decisions are listed on the right; decision rules are listed on the left. Match each decision rule with the appropriate decision type. Each listed item has only one correct answer. ✓ Accept if price is greater than or equal to the sum of variable costs, relevant fixed costs and opportunity costs. ✓ Drop if the contribution margin is less than the sum of relevant fixed costs and opportunity costs. Emphasize the product with the highest contribution margin per unit if resources are not constrained If resources are constrained, emphasize the product with the highest contribution margin per unit of the constrained resource. When operating with resource constraints, emphasize the product with the highest overall profit margin. ✓ Outsource if the cost to buy is greater than or equal to the sum of the variable costs and relevant fixed costs, less opportunity costs. For outsourcing decisions, the general rule is managers should choose the option with the lowest relevant cost. ✓ Keep work inside if the cost to buy is less than or equal to the sum of variable costs and relevant fixed costs. ✓ If the price is greater than or equal to the sum of variable costs and opportunity costs, accept the order A. Keep or drop business segment (drop or retain business segment decision) B. Product emphasis C. Special order D. Insource or outsource E. None of the special decision types are correct. Make the product if the cost to buy is greater than or equal to the difference between variable costs and opportunity costs.

Answer rating: 100% (QA)

Answer 1 Keep or drop business segment drop or retain business segment decision 2 Drop if the contribution margin is less than the sum of relevant fixed costs and opportunity costs 3 Emphasize the pro... View the full answer