Questions from Cost Management

Q: Does the accounting (book) rate of return (ARR)

Does the accounting (book) rate of return (ARR) method provide a valid (or meaningful) measure of the return on investment? How about the investment’s internal rate of return (IRR)?

Q: What should be the decision criterion when using the NPV method to

What should be the decision criterion when using the NPV method to evaluate capital investments? Does the IRR method use the same criterion?

Q: List at least three important behavioral issues related to the capital budgeting

List at least three important behavioral issues related to the capital budgeting process.

Q: “The net present value (NPV) method weighs early receipts

“The net present value (NPV) method weighs early receipts of cash much more heavily than more distant receipts of cash.” Do you agree? Why?

Q: What is target costing? briefly explain.

What is target costing? briefly explain.

Q: What does the term constraints mean in the theory of constraints analysis

What does the term constraints mean in the theory of constraints analysis?

Q: What is the role of the flow diagram in the theory of

What is the role of the flow diagram in the theory of constraints analysis?

Q: What is the main difference between activity-based costing and the

What is the main difference between activity-based costing and the theory of constraints? When is it appropriate to use each one?

Q: Weatherly Lumber Company processes wood pulp for manufacturing various paper products.

Weatherly Lumber Company processes wood pulp for manufacturing various paper products. The company employs a process costing system for its manufacturing operations. All direct materials are added at...