Good management accounting indicates that projects be evaluated using relevant data. In choosing among alternatives, what factors (considerations) are relevant?
What will be an ideal response?
Relevant data includes both financial and nonfinancial measures. Financial
considerations are relevant (avoidable) costs and relevant benefits (incremental revenues),
from choices considered. The two types of costs that are relevant are known as out-of-pocket
costs and opportunity costs. Nonfinancial considerations include information on environmental
effects, political sensitivities, and social responsibility.
You might also like to view...
Bruno goes out of his way to exhibit his manliness in everything he does, from how he dresses to how he speaks to others to how he treats his friends and his romantic partner. It is likely that Bruno equates manliness with which of the following?
A. popularity B. power C. being voted homecoming king D. being the ideal candidate for a job at the local hamburger stand
When preparing a statement of cash flows using the indirect method, why is depreciation added back to net income within the operating activities section?
What is the effect of the payment of an account payable on the current ratio and the quick ratio, respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction.)
a. Decrease in current ratio; no effect on quick ratio b. Increase in current ratio; increase in quick ratio c. No effect on current ratio; no effect on quick ratio d. Decrease in current ratio; decrease in quick ratio
The cap and trade approach to climate change has validity because:
A. Polluters pay. B. The market decides the outcome. C. Companies tend to take seriously everything identifiable that effects the bottom-line. D. It avoids a system of taxation. E. All of the above make a strong case for cap-and-trade systems