Reference no: EM132911432

Problem 1: For a retail outlet chain with multiple stores, which of the following statements would be correct?

Select one:

a. Stores which have a net loss should be discontinued.

b. Stores with a negative contribution margin should be discontinued.

c. Stores with a negative contribution margin should be discontinued provided such discontinuation will not cause an increase in sales at other stores.

d. Stores with a negative contribution margin should not be discontinued if such discontinuation will cause profitable stores to bear a portion of the unprofitable store's overhead.

Problem 2: Which of the following is not one of the objectives in utilizing standard costs?

Select one:

a. To simplify costing procedures and expedite cost reports.

b. To allow management to readily determine and focus attention on special problem areas.

c. To allow a measure of cost assuming ideal or perfect operating conditions.

d. To provide a measure of budgeted cost for a single unit of activity.