College Acct Help?

Question

Which of the following could not be a relevant cost in deciding whether or not to eliminate a producing department?

The carrying value of the department's equipment

Revenue that could be generated by renting out the department's space

The salary of a supervisor who would be laid off

The current residual value of the department's equipment


2,
Supplying relevant information to managers for each alternative in the decision-making process is the responsibility of the

management accountant.

credit and collection manager.

production manager.

manager of internal audit.

Answer 1

1. The carrying value of the department's equipment could not be a relevant cost in deciding whether or not to eliminate a producing department. The carrying cost of any asset may have nothing to do with its fair market value. Knowing an asset's realisable value is far better than knowing its carrying value.

2. Supplying relevant information to managers for each alternative in the decision-making process is the responsibility of the management accountant. The mgt a/ctant collates all the necessary information from people like the credit and collection manager, production manager, manager of internal audit, etc before submitting his reports to the higher-ups for decision-making purposes.