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Question Description

Choose one of the 4 questions for your discussion this week.

  • Many sales managers have a good intuitive understanding of cost, but they are often are imprecise in how they describe the costs. For example, a manager may say the following: Increasing sales will decrease fixed costs because it spreads them over more units. Do you agree or disagree with that statement? Why?
  • Decisions on whether to outsource services such as payroll accounting, IT, or systems development are much like make or buy decisions. What cost factors should influence the decision to outsource? Chose a service that may be outsourced and outline a case.
  • Economic theory states that managers should set a price equal to marginal cost in perfect competition. Accountants use variable cost to approximate marginal costs. Compare and contrast marginal costs and variable costs and explain whether using variable costs as an approximation for marginal costs is appropriate for making pricing decisions.
  • “Accountants cannot measure opportunity costs. Only managers have the knowledge to measure it.” Do you agree with this statement? Why or why not?