_______________ 1.

That point in the manufacturing process at which the joint product can be
recognized as separate products.

_______________ 2. Are never relevant in decisions because they are not avoidable and therefore,
they must be eliminated from the manager’s decision framework.

_______________ 3. When capacity becomes pressed because of a scarce resource, the firm is said to
have?

_______________ 4. [Cost + (Markup percentage * Cost)]

_______________ 5. Can be defined as a cost that can be eliminated (in whole or in part) as a result of
choosing one alternative over another in a decision-making situation.

_______________ 6. Cost incurred after the split-off point for the benefit of only one particular
product.

_______________ 7. The optimal proper combination of product “mix” can be found by use of a
quantitative method knows as?

_______________ 8. Is a management decision about whether an item should be made internally or

bought from an outside supplier.

_______________ 9. Depreciation is __________ in decision only if it relates to a sunk cost.

_______________ 10. Where the cost based is defined as the costs to manufacture one unit and
therefore excludes all selling general and administrative expenses.

_______________ 11. Expected future costs which differ between the decision alternatives. These are
costs that will be increased or decreased as a result of a decision.

_______________ 12. Used to describe those manufacturing costs that are incurring is producing the
joint products up to the split-off joint.

_______________ 13. One-time order that is not considered part of the company’s ongoing business.

_______________ 14. Anticipated selling price – Desired profit

_______________ 15. Involve either an intermediate or near-future cash outlay.

TARGET SELLING PRICE CONSTRAINT CONTRIBUTION APPROACH

IRRELEVANT MAKE-OR-BUY DECISION AVOIDABLE COSTS

JOINT PRODUCT OUT-OF-POCKET COSTS SPECIAL ORDER

TARGET COST CONTRIBUTION MARGIN TARGET COSTING

SEPARABLE COSTS ABSORPTION APPROACH RELEVANT COSTS

SPLIT – OFF POINT SUNK OR HISTORICAL COSTS LINEAR PROGRAMMING

ANSWER KEY:

1. SPLIT – OFF POINT

2. SUNK OR HISTORICAL COSTS
3. CONSTRAINT
4. TARGER SELLING PRICE
5. AVOIDABLE COST
6. SEPARABLE COSTS
7. LINEAR PROGRAMMING
8. MAKE-OR-BUY DECISION
9. IRRELEVANT
10. ABSORPTION APPROACH
11. RELEVANT COSTS
12. JOINT PRODUCT
13. SPECIAL ORDER
14. TARGET COST
15. OUT-OF-POCKET COSTS