Kuis

1) A decision model involves a(n) ________.

A) informal method of making a choice at the lower level management using sensitivity analysis
B) formal method of making a choice that often involves both quantitative and qualitative analyses
C) informal method of making a choice which is discussed in detailed in the financial reports
D) formal method of making a choice at the lower level management using advanced management
techniques such as balance scorecard

2) Place the following steps from the five-step decision process in order:
A = Obtain information including historical costs
B = Evaluate performance to provide feedback
C = Make decisions choosing among alternatives
D = Make predictions about the future
E = Identify the problem and uncertainties
A) A, E, D, B, C
B) C, D, E, A, B
C) E, A, D, C, B
D) D, C, B, A, E

3) The formal process of choosing between alternatives is known as a(n) ________.

A) relevant model
B) decision model
C) alternative model
D) prediction model

4) When using the five-step decision process, which one of the following steps should be done last?
A) obtain information
B) choose an alternative
C) evaluation and feedback
D) implementing the decision

5) When using the five-step decision process, which one of the following steps should be done first?
A) obtain information
B) choose an alternative
C) evaluation and feedback
D) implementing the decision

6) A decision model is an informal method for making a choice, using simpler methods like
surveying.

7) Feedback from previous decisions uses historical information and, therefore, is irrelevant for
making future predictions.

8) For decision making, a listing of the relevant costs ________.

A) will help the decision maker concentrate on the pertinent data
B) will only include historical costs
C) will only include costs that that are same among alternatives
D) will include both sunk costs and opportunity costs
9) Sunk costs ________.
A) are future costs for decision making
B) are avoidable costs
C) are irrelevant for decision making
D) are foregone contribution by not using a limited resource in its next-best alternative use

10) Sunk costs ________.

A) are relevant
B) are differential
C) have future implications
D) are ignored when evaluating alternatives

11) Which of the following is an example of sunk costs?

A) wages to security staffs
B) cost of purchasing raw materials
C) cost of an alternative investment
D) wages payable to skilled laborers to make a product

12) Which of the following costs always differ among future alternatives?
A) fixed costs
B) historical costs
C) relevant costs
D) variable costs