Cost Accounting Chapter 13

Which type of prescriptive analytics evaluates outcomes based on uncertainty regarding the inputs?

sensitivity analysis

An assessment regarding which large investment to invest in is typically called:

capital budgeting

Which analysis helps managers decide whether to outsource certain aspects of producing a product or service?

make-or-buy analysis

Which prescriptive analytics technique evaluates the average expected impact of potential future events by considering their potential outcomes?

scenario analysis

Which software tool is used to perform sensitivity analysis regarding the impact of varying one or two inputs (assumptions) to evaluate the output?

data table

Price elasticity of demand is:

a measure of the change in consumption of a product relative to a change in price

A price elasticity of demand of 4 suggests that _______

if price increases one percent, demand will fall by four percent

If a company is trying to maximize its profits through its product pricing, what is the objective function?

maximize profits associated with its products

If a company is trying to maximize its profits by adjusting its product mix, what is a common constraint of the optimization?

the resources available to produce or offer its products

Which technique may work to maximize profits by varying product prices subject to certain constraints?

optimization

The decision variable in a product pricing optimization is:

Break-even analysis is performed using the prescriptive analytics tool of:

price of product

The objective function of a product mix decision is to ______ subject to constraints?

maximize products

What is a prescriptive analytics technique to determine the change in profit typically associated with the differences in revenues and costs among alternate courses of action?

differential analysis

Which of the following is an example of a changing condition in the automotive industry?

3D printers are now widely used in production processes

In a make-or-buy analysis, all of the following are key inputs to the decision except:

sunk costs

According to Douglas Hicks’ Second Law of Pricing, the market determines the price of the product, and cost determines:

whether or not the company wants to sell at the market price

Which Excel software tool is used to optimize product mix?

excel solver

In Accenture’s Meet the Finance 2020 Workforce document, the company suggests that accountants should be able to answer “What Shall We Do'“-type questions. Which analytics time does that category correspond to?

prescriptive analytics