MULTIPLE CHOICE11
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MULTIPLE CHOICE11

Course Number: ACCTG 101, Spring 2010

College/University: Alabama State

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MULTIPLE CHOICE 42. Feedback regarding previous actions may affect a. future predictions. b. implementation of the decision. c. the decision model. d. all of the above. Answer: d Difficulty: 2 Objective: 1 43.Place the following steps from the five-step decision process in order: A = Make predictions about future costs B = Evaluate performance to provide feedback C = Implement the decision D = Choose an...

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CHOICE MULTIPLE 42. Feedback regarding previous actions may affect a. future predictions. b. implementation of the decision. c. the decision model. d. all of the above. Register to View AnswerDifficulty: 2 Objective: 1 43.Place the following steps from the five-step decision process in order: A = Make predictions about future costs B = Evaluate performance to provide feedback C = Implement the decision D = Choose an alternative a. DCAB b. CDAB c. ADCB d. DCBA Register to View AnswerDifficulty: 2 Objective: 1 44. The formal process of choosing between alternatives is known as a. a relevant model. b. a decision model. c. an alternative model. d. a prediction model. Register to View AnswerDifficulty: 1 Objective: 1 45. Ruggles Circuit Company manufactures circuit boards for other firms. Management is attempting to search for ways to reduce manufacturing labor costs and has received a proposal from a consulting company to rearrange the production floor next year. Using the information below regarding current operations and the new proposal, which of the following decisions should management accept? Currently 5 1.25 $8 per hour 2,100 Proposed 4.5 1.25 $9 per hour 2,000 Required machine operators Materials-handling workers Employee average pay Hours worked per employee a. b. c. d. Do not change the production floor. Rearrange the production floor. Either, because it makes no difference to the employees. It doesn't matter because the costs incurred will remain the same. Register to View AnswerDifficulty: 2 Current operations: 5 workers x 2,100 hours x $8.00 = $84,000 Proposal: 4.5 workers x 2,000 hours x $9.00 = $81,000 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 46 AND 47. LeBlanc Lighting manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year. With a 50-cent price increase, demand is expected to fall by 3,000 units. Currently Projected Demand 20,000 units 17,000 units Selling price $4.50 $5.00 Incremental cost per unit $3.00 $3.00 46. If the price increase is implemented, operating profit is projected to a. increase by $4,000. b. decrease by $4,000. c. increase by $6,000. d. decrease by $4,500. Register to View AnswerDifficulty: 2 [17,000 x ($5 - $3)] [20,000 x ($4.50 - $3.00)] = increase of $4,000 47. Would you recommend the 50-cent price increase? a. No, because demand decreased. b. No, because the selling price increases. c Yes, because contribution margin per unit increases. d. Yes, because operating profits increase. Register to View AnswerDifficulty: 2 Objective: 1 48.For decision making, a listing of the relevant costs a. will help the decision maker concentrate on the pertinent data. b. will only include future costs. c. will only include costs that differ among alternatives. d. should include all of the above. Register to View AnswerDifficulty: 2 Objective: 2 49. Sunk costs a. are relevant. b. are differential. c. have future implications. d. are ignored when evaluating alternatives. Register to View AnswerDifficulty: 1 Objective: 2 50. A computer system installed last year is an example of a. a sunk cost. b. a relevant cost. c. a differential cost. d. an avoidable cost. Register to View AnswerDifficulty 51. Costs that CANNOT be changed by any decision made now or in the future are a. fixed costs. b. indirect costs. c. avoidable costs. d. sunk costs. Register to View AnswerDifficulty: 1 Objective: 2 52. In evaluating different alternatives, it is useful to concentrate on a. variable costs. b. fixed costs. c. total costs. d. relevant costs. Register to View AnswerDifficulty: 1 Objective: 2 53. Which of the following costs always differ among future alternatives? a. Fixed costs b. Historical costs c. Relevant costs d. Variable costs Register to View AnswerDifficulty: 1 Objective: 2 54. Which of the following costs are never relevant in the decision-making process? a. Fixed costs b. Historical costs c. Relevant costs d. Variable costs Register to View AnswerDifficulty: 1 Objective: 2 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 55 AND 56. Jims 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it roadworthy again. His friend, Julie, suggested that he should buy a 5-year-old used Honda Civic instead for $3,000 cash. Julie estimated the following costs for the two cars: Geo Prizm $15,000 $ 3,000 $ 2,280 Honda Civic $3,000 $2,100 Acquisition cost Repairs Annual operating costs (Gas, maintenance, insurance) 55. The cost NOT relevant for this decision is(are) a. the acquisition cost of the Geo Prizm. b. the acquisition cost of the Honda Civic. c. the repairs to the Geo Prizm. d. the annual operating costs of the Honda Civic. Register to View Answer56. What should Jim do? What are his savings in the first year? a. Buy the Honda Civic; $9,780 b. Fix the Geo Prizm; $5,518 c. Buy the Honda Civic; $180 d. Fix the Geo Prizm; $5,280 Register to View AnswerDifficulty: 2 Objective: 2 Geo ($3,000 + $2,280) - Honda ($3,000 + $2,100) = $180 cost savings with the Honda option 57. Quantitative factors a. include financial information, but not nonfinancial information. b. can be expressed in monetary terms. c. are always relevant when making decisions. d. include employee morale. Register to View AnswerDifficulty: 2 Objective: 3 58. Qualitative factors a. generally are easily measured in quantitative terms. b. are generally irrelevant for decision making. c. may include either financial or nonfinancial information. d. include customer satisfaction. Register to View AnswerDifficulty: 2 Objective: 3 59. Historical costs are helpful a. for making future predictions. b. for decision making. c. because they are quantitative. d. with none of the above. Register to View AnswerDifficulty: 2 Objective: 3 60. When making decisions a. quantitative factors are the most important. b. qualitative factors are the most important. c. appropriate weight must be given to both quantitative and qualitative factors. d. both quantitative and qualitative factors are unimportant. Register to View AnswerDifficulty: 2 Objective: 3 Chapter 11 Page 9 61. Employee morale at Dos Santos, Inc., is very high. This type of information is known as a. a qualitative factor. b. a quantitative factor. c. a nonmeasurable factor. d. a financial factor. Register to View AnswerDifficulty: 1 Objective: 3 62. Roberto owns a small body shop. His major costs include labor, parts, and rent. In the decision-making process, these costs are considered to be a. fixed. b. qualitative factors. c. quantitative factors. d. variable. Register to View AnswerDifficulty: 1 Objective: 3 63. One-time-only special orders should only be accepted if a. incremental revenues exceed incremental costs. b. differential revenues exceed variable costs. c. incremental revenues exceed fixed costs. d. total revenues exceed total costs. Register to View AnswerDifficulty: 3 Objective: 3 64. When deciding to accept a one-time-only special order from a wholesaler, management should do all EXCEPT a. analyze product costs. b. consider the special order s impact on future prices of their products. c. determine whether excess capacity is available. d. verify past design costs for the product. Register to View AnswerDifficulty: 3 Objective: 3 65. When there is excess capacity, it makes sense to accept a one-time-only special order for less than the current selling price when a. incremental revenues exceed incremental costs. b. additional fixed costs must be incurred to accommodate the order. c. the company placing the order is in the same market segment as your current customers. d. it never makes sense. Register to View AnswerTHE FOLLOWING INFORMATION APPLIES TO QUESTIONS 66 THROUGH 69. Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $40 Direct labor 20 Manufacturing support 35 Marketing costs 15 Fixed costs: Manufacturing support 45 Marketing costs 15 Total costs 170 Markup (50%) 85 Targeted selling price $255 66. What is the full cost of the product per unit? a. $110 b. $170 c. $255 d. $85 Register to View AnswerDifficulty: 3 Objective: 3 $40 + $20 + $35 + $15 + $45 + $15 = $170 67. What is the contribution margin per unit? a. $85 b. $110 c. $145 d. $255 Register to View AnswerDifficulty: 3 Objective: 3 $255 ($40 + $20 + $35 + $15) = $145 68. For Welch Manufacturing, what is the minimum acceptable price of this special order? a. $110 b. $145 c. $170 d. $255 Register to View AnswerDifficulty: 3 Objective: 3 $40 + $20 + $35 + $15 = $110 69. What is the change in operating profits if the 1,000 unit onetime-only special order is accepted for $180 a unit by Welch? a. $70,000 increase in operating profits b. $10,000 increase in operating profits c. $10,000 decrease in operating profits d. $75,000 decrease in operating profits Register to View AnswerDifficulty: 3 Objective: 3 $180 ($40 + $20 + $35 + $15) = $70; 1,000 x $70 = $70,000 increase Chapter 11 Page 11 70. Ratzlaff Company has a current production capacity level of 20,000 units per month. Unit costs at this level are: Direct materials Direct labor Variable overhead Fixed overhead Marketing/distribution - variable $0.25 0.40 0.15 0.20 0.40 Current monthly sales are 18,000 units. Jim Company has contacted Ratzlaff Company about purchasing 1,500 units at $2.00 each. Current sales would not be affected by the one-time-only special order, and variable marketing/distribution costs would not be incurred on the special order. What is Ratzlaff Companys change in operating profits if the special order is accepted? a. $400 increase in operating profits b. $400 decrease in operating profits c. $1,800 increase in operating profits d. $1,800 decrease in operating profits Register to View AnswerDifficulty: 3 Manufacturing cost per unit = $0.25 + $0.40 + $0.15 = $0.80 1,500 x ($2.00 - $0.80) = $1,800 increase 71.Black Tool Company has a production capacity is 1,500 units per month, but current production is only 1,250 units. The manufacturing costs are $60 per unit and marketing costs are $16 per unit. Doug Hall offers to purchase 250 units at $76 each for the next five months. Should Black accept the one-time-only special order if only absorptioncosting data are available? a. Yes, good customer relations are essential. b. No, the company will only break even. c. No, since only the employees will benefit. d. Yes, since operating profits will most likely increase. Register to View AnswerDifficulty: 3 Objective: 3 Since the $60 absorption cost per unit is most likely not all variable costs and since the entire $16 per unit of marketing costs may not be incurred, operating profits will most likely increase. THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 72 THROUGH 75. Grant s Kitchens is approached by Ms. Tammy Wang, a new customer, to fulfill a large onetime-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers: Directmaterials $455 Directlabor 300 V ariablemanufacturingsupport Fixedmanufacturingsupport T otalmanufacturingcosts 900 Markup(60%) 5 40 T argetedsellingprice $140 4 45 1 00 Ms. Wang wants the cabinets in cherry rather than oak, so direct material costs will increase by $30 per unit. 72. For Grant s Kitchens, what is the minimum acceptable price of this one-time-only special order? a. $830 b. $930 c. $785 d. $1440 Register to View AnswerDifficulty: $455 + $300 + $45 + $30 = $830 73. Other than price, what other items should Grant s Kitchens consider before accepting this one-time-only special order? a. Reaction of shareholders b. Reaction of existing customers to the lower price offered to Ms. Wang c. Demand for cherry cabinets d. Price is the only consideration. Register to View AnswerDifficulty: 2 Objective: 3 74. If Ms. Wang wanted a long-term commitment for supplying this product, this analysis a. would definitely be different. b. may be different. c. would not be different. d. does not contain enough information to determine if there would be a difference. Register to View AnswerDifficulty: 2 Objective: 3 75. If there was limited capacity, all of the following amounts would change EXCEPT a. opportunity costs. b. differential costs. c. variable costs. d. the minimum acceptable price. Register to View AnswerTHE FOLLOWING INFORMATION APPLIES TO QUESTIONS 76 AND 77. Northwoods manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $90 per table, consisting of 80% variable costs and 20% fixed costs. The company has surplus capacity available. It is Northwoods policy to add a 50% markup to full costs. 76. Northwoods is invited to bid on a one-time-only special order to supply 100 rustic tables. What is the lowest price Northwoods should bid on this special order? a. $6,300 b. $7,200 c. $9,000 d. $13,500 Register to View AnswerDifficulty: $90 x 80% x 100 tables = $7,200 77. A large hotel chain is currently expanding and has decided to decorate all new hotels using the rustic style. Northwoods Incorporated is invited to submit a bid to the hotel chain. What is the lowest price per unit Northwoods should bid on this longterm order? a. $63 b. $72 c. $90 d. $135 Register to View Answer$90 + ($90 x 50%) = $135 Difficulty: 2 Objective: 3 78. Cochran Corporation has a plant capacity of 100,000 units per month. Unit costs at capacity are: Directmaterials Directlabor 6.00 V ariableoverhead Fixedoverhead Marketingfixed $4.00 3.00 1 .00 .00 7 3.60 Marketing/distributionvariable Current monthly sales are 95,000 units at $30.00 each. Suzie, Inc., has contacted Cochran Corporation about purchasing 2,000 units at $24.00 each. Current sales would not be affected by the one-time-only special order. What is Cochran s change in operating profits if the one-time-only special order is accepted? a. $14,800 increase b. $17,200 increase c. $22,000 increase d. $33,200 increase Register to View AnswerDifficulty: 3 ($4.00 + 6.00 + 3.00 + 3.60) = $16.60 ($24.00 16.60) x 2,000 = $14,800 increase Objective: 3 Chapter 11 Page 14 79. The sum of all the costs incurred in a particular business function (for example, marketing) is called the a. business function cost. b. full product cost. c. gross product cost. d. multiproduct cost. Register to View AnswerDifficulty: 1 Objective: 3 80. The sum of all costs incurred in all business functions in the value chain (product design, manufacturing, marketing, and customer service, for example) is known as the a. business cost. b. full product cost. c. gross product cost. d. multiproduct cost. Register to View AnswerDifficulty: 1 Objective: 3 81. Problems that should be avoided when identifying relevant costs include all EXCEPT a. assuming all variable costs are relevant. b. assuming all fixed costs are irrelevant. c. using unit costs that do not separate variable and fixed components. d. using total costs that separate variable and fixed components. Register to View AnswerDifficulty: 2 Objective: 4 82. The BEST way to avoid misidentification of relevant costs is to focus on a. expected future costs that differ among the alternatives. b. historical costs. c. unit fixed costs. d. total unit costs. Register to View AnswerDifficulty: 2 Objective: 4 83. Factors used to decide whether to outsource a part include a. the supplier s cost of direct materials. b. if the supplier is reliable. c. the original cost of equipment currently used for production of that part. d. past design costs used to develop the current composition of the part. Register to View AnswerDifficulty: 2 Objective: 4 84. Relevant costs of a make-or-buy decision include all EXCEPT a. fixed salaries that will not be incurred if the part is outsourced. b. current direct material costs of the part. c. special machinery for the part that has no resale value. d. material- handling costs that can be eliminated. Register to View AnswerDifficulty: Chapter 11 3 Objective: 4 Page 15 85. Which of following are risks of outsourcing the production of a part? a. Unpredictable quality b. Unreliable delivery c. Unscheduled price increases d. All of the above are risks of outsourcing. Register to View AnswerDifficulty: 1 Objective: 4 86. Which of the following minimize the risks of outsourcing? a. The use of short-term contracts that specify price b. The responsibility for on-time delivery is now the responsibility of the supplier c. Building close relationships with the supplier d. All of the above minimize the risks of outsourcing. Register to View AnswerDifficulty: 3 Objective: 4 87. The cost to produce Part A was $10 per unit in 20x3 and in 20x4 has increased to $11 per unit. In 20x4, Supplier XYZ has offered to supply Part A for $9 per unit. For the make-or-buy decision, a. incremental revenues are $2 per unit. b. incremental costs are $1 per unit. c. net relevant costs are $1 per unit. d. differential costs are $2 per unit. Register to View AnswerDifficulty: 2 Objective: 4 88. When evaluating a make-or-buy decision, which of the following does NOT need to be considered? a. Alternative uses of the production capacity b. The original cost of the production equipment c. The quality of the supplier's product d. The reliability of the supplier's delivery schedule Register to View AnswerDifficulty: 2 Objective: 4 89. For make-or-buy decisions, a supplier's ability to deliver the item on a timely basis is considered a. a qualitative factor. b. a relevant cost. c. a differential factor. d. an opportunity cost. Register to View AnswerDifficulty: 1 Objective: 4 Chapter 11 Page 16 90. The incremental costs of producing one more unit of product include all of the following EXCEPT a. direct materials. b. direct labor. c. variable overhead costs. d. fixed overhead costs. Register to View AnswerDifficulty: 2 Objective: 4 91. Direct materials $40, direct labor $10, variable overhead costs $30, and fixed overhead costs $20. In the short term, the incremental cost of one unit is a. $30. b. $50. c. $80. d. $100. Register to View AnswerDifficulty: 2 Objective: 4 92. Unit cost data can MOST mislead decisions by a. not computing fixed overhead costs. b. computing labor and materials costs only. c. computing administrative costs. d. not computing unit costs at the same output level. Register to View AnswerDifficulty: 1 Objective: 4 93. Schmidt Sewing Company incorporates the services of Deb's Sewing. Schmidt purchases pre-cut dresses from Deb's. This is primarily known as a. insourcing. b. outsourcing. c. relevant costing. d. sunk costing. Register to View AnswerDifficulty: 1 Objective: 4 94. Pearce Sign Company manufactures signs from direct materials to the finished product. This is considered a. insourcing. b. outsourcing. c. relevant costing. d. sunk costing. Register to View AnswerDifficulty: 1 Objective: 4 95. Which of the following would NOT be considered in a makeor-buy decision? a. Fixed costs that will no longer be incurred b. Variable costs of production c. Potential rental income from space occupied by the production area d. Unchanged supervisory costs Register to View AnswerDifficulty: 2 Objective: 4 Chapter 11 Page 17 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 96 THROUGH 98. Konrade s Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials $ 40,000 Direct labor Variable overhead costs Fixed overhead costs Total costs 10,000 30,000 20,000 $100,000 It is estimated that 10% of the fixed overhead costs assigned to TE456 will no longer be incurred if the company purchases TE456 from the outside supplier. Konrade s Engine Company has the option of purchasing the part from an outside supplier at $85 per unit. 96. If Konrade s Engine Company accepts the offer from the outside supplier, the monthly avoidable costs (costs will no longer be incurred) total a. $ 82,000. b. $ 98,000. c. $ 50,000. d. $100,000. Register to View AnswerDifficulty: 2 $40,000 + $10,000 + $30,000 + ($20,000 x 10%) = $82,000 97. If Konrade s Engine Company purchases 1,000 TE456 parts from the outside supplier per month, then its monthly operating income will a. increase by $2,000. b. increase by $80,000. c. decrease by $3,000. d. decrease by $85,000. Register to View AnswerDifficulty: 2 Objective: Avoidable costs $82,000 ($85 x 1,000 units) = decrease of $3,000 98. The maximum price that Konrade s Engine Company should be willing to pay the outside supplier is a. $80 per TE456 part. b. $82 per TE456 part. c. $98 per TE456 part. d. $100 per TE456 part. Register to View AnswerDifficulty: 2 Avoidable costs $82,000 / 1,000 units = $82 per part Objective: 4 Chapter 11 Page 18 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 99 AND 100. Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total costs $ 45,000 65,000 30,000 70,000 $210,000 Of the fixed factory overhead costs, $30,000 is avoidable. 99. Phil Company has offered to sell 10,000 units of the same part to Schmidt Corporation for $18 per unit. Assuming there is no other use for the facilities, Schmidt should a. make the part as this would save $3 per unit. b. buy the part as this would save $3 per unit. c. buy the part as this would save the company $30,000. d. make the part as this would save $1 per unit. Register to View AnswerDifficulty: 3 Objective: 4 Avoidable costs total $170,000 = $45,000 + $65,000 + $30,000 + $30,000. $18 $170,000/10,000 = $1 100. Assuming no other use of their facilities, the highest price that Schmidt should be willing to pay for 10,000 units of the part is a. $210,000. b. $140,000. c. $170,000. d. $180,000. Register to View AnswerDifficulty: 3 $45,000 + $65,000 + $30,000 + $30,000 = $170,000 Objective: 4 101. Relevant costs in a make-or-buy decision of a part include a. setup overhead for the manufacture of the product using the outsourced part. b. currently used manufacturing capacity that has alternative uses. c. annual plant insurance costs that will remain the same. d. corporate office costs that will be allocated differently. Register to View AnswerDifficulty: 3 Objective: 5 102. If Horsley Corporation doesn't use one of its limited resources in the best possible way, the lost contribution to income could be called a. a variable cost. b. a fixed cost. c. an opportunity cost. d. a sunk cost. Register to View AnswerDifficulty: Chapter 11 1 Objective: 5 Page 19 103. When a firm has constrained capacity as opposed to surplus capacity, opportunity costs will be a. lower. b. the same. c. greater. d. it varies. Register to View AnswerDifficulty: 2 Objective: 5 104. Opportunity costs a. result in a cash outlay. b. only are considered when selecting among alternatives. c. are recorded in the accounting records. d. should be maximized for the best decision. Register to View AnswerDifficulty: 2 Objective: 5 105. Opportunity cost(s) a. of a resource with excess capacity is zero. b. should be maximized by organizations. c. are recorded as an expense in the accounting records. d. are most important to financial accountants. Register to View AnswerDifficulty: 2 Objective: 5 106. For make-or-buy decisions, relevant costs include a. direct material costs plus direct labor costs. b. incremental costs plus opportunity costs. c. differential costs plus fixed costs. d. incremental costs plus differential costs. Register to View AnswerDifficulty: 3 Objective: 5 107. The opportunity cost of holding significant inventory includes a. the interest forgone on an alternative investment. b. additional insurance costs. c. additional storage costs. d. all of the above. Register to View AnswerDifficulty: 2 Objective: 5 Chapter 11 Page 20 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 108 AND 109. Stephans Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct materials 1.00 Direct labor 10.00 Variable overhead 5.00 Fixed overhead 8.00 Total $ $24.00 Bill Company has contacted Stephans with an offer to sell them 5,000 of the subassemblies for $22.00 each. Stephans will eliminate $25,000 of fixed overhead if it accepts the proposal. 108. What are the relevant costs for Stephans? a. $140,000 b. $125,000 c. $105,000 d. $80,000 Register to View AnswerDifficulty: 2 ($1 + 10 + 5) x 5,000 + $25,000 = $105,000 Objective: 5 109. Should Stephans make or buy the subassemblies? What is the difference between the two alternatives? a. Buy; savings = $20,000 b. Buy; savings = $50,000 c. Make; savings = $60,000 d. Make; savings = $5,000 Register to View AnswerCost to buy: Cost to make: Difficulty: 3 5,000 x $22 = $110,000 $110,000 - 105,000 = $5,000 ** make Objective: 5 110. A recent college graduate has the choice of buying a new auto for $20,000 or investing the money for four years with a 6% expected rate of return. If the graduate decides to purchase the auto, the BEST estimate of the opportunity cost of that decision is a. $1,200. b. $4,800. c. $20,000. d. zero since there is no opportunity cost for this decision. Register to View AnswerDifficulty: 2 Objective: $20,000 x 6% x 4 years = $4,800 cost of the opportunity not chosen. 5 Chapter 11 Page 21 111. A supplier offers to make Part A for $70. Jansen Company has relevant costs of $80 a unit to manufacture Part A. If there is excess capacity, the opportunity cost of buying Part A from the supplier a. is zero. b. is $10,000. c. is $70,000. d. cannot be determined using the above information. Register to View AnswerDifficulty: 2 Objective: 5 112. Jensen Company has relevant costs of $80 per unit to manufacture Part A. A current supplier offers to make Part A for $70 per unit. If capacity is constrained, the opportunity cost of buying Part A from the supplier a. is zero. b. is $10,000. c. is $70,000. d. cannot be determined using the above information. Register to View AnswerDifficulty: 2 Objective: 5 Information regarding alternative uses for the capacity would determine the opportunity cost. 113. Determining which products should be produced when the plant is operating at full capacity is referred to as a. an outsourcing analysis. b. production scheduling analysis. c. a product-mix decision. d. a short-run focus decision. Register to View AnswerDifficulty: 1 Objective: 6 114. Product mix decisions a. have a long-run focus. b. help determine how to maximize operating profits. c. focus on selling price per unit. d. are all of the above. Register to View AnswerDifficulty: 2 Objective: 6 115. Constraints may include a. the availability of direct materials in manufacturing. b. linear square feet of display space for a retailer. c. direct labor in the service industry. d. all of the above. Register to View AnswerDifficulty: Objective: 1 6 Chapter 11 Page 22 116. For determining the best mix of products, the one with the LEAST amount of influence is a. the market price of the products. b. corporate office costs allocated to each product. c. the use of capacity resources. d. contribution margins. Register to View AnswerDifficulty: 3 Objective: 6 117. In product-mix decisions, a. always focus on maximizing total contribution margin. b. focus on the product with the greatest contribution margin per machine-hour. c. focus on the full costs of the product. d. never focus on the short-term, but include only long-term considerations. Register to View AnswerDifficulty: 3 Objective: 6 Chapter 11 Page 23 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 118 THROUGH 122. Braun s Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply: ModelXModelYModelZ Sellingprice$50$60$70 Directmaterials666 Directlabor($12perhour)121224 Variablesupportcosts ($4permachinehour)488 Fixedsupportcosts101010 118. Which model has the greatest contribution margin per unit? a. Model X b. Model Y c. Model Z d. Both Models X and Y Register to View AnswerDifficulty: 2 $50 - $6 - $12 - $4 = $28 $60 - $6 - $12 $8 = $34 **highest $70 - $6 - $24 - $8 = $32 Objective: 6 119. Which model, has the greatest contribution margin per machine-hour? a. Model X b. Model Y c. Model Z d. Both Models Y and Z Answer: Model X Model Y Model Z a Difficulty: 2 $50 - $6 - $12 $4 = $28 / 1 = $28 **highest $60 - $6 - $12 - $8 = $34 / 2 = $17 $70- $6 - $24 - $8 = $32 / 2 = $16 Objective: 6 120. If there is excess capacity, which model is the most profitable to produce? a. Model X b. Model Y c. Model Z d. Both Models X and Y Register to View AnswerDifficulty: 3 Objective: Model Y since it has the greatest contribution margin per unit 6 121. If there is a machine breakdown, which model is the most profitable to produce? a. Model X b. Model Y c. Model Z d. Both Models Y and Z Register to View AnswerDifficulty: 3 Objective: Model X since it has the greatest contribution margin per machine-hour Chapter 11 Page 24 6 122. How can Lisa Braun encourage her salespeople to promote the more profitable model? a. Put all sales persons on salary b. Provide sales higher commissions for higher priced items c. Provide higher sales commissions for items with the greatest contribution margin per constrained resource d. Both (b) and (c) Register to View AnswerDifficulty: 2 Objective: 6 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 123 THROUGH 125. Helmer s Rockers manufactures two models, Standard and Premium. Weekly demand is estimated to be 100 units of the Standard Model and 70 units of the Premium Model. The following per unit data apply: Standard Contribution margin per unit Number of machine-hours required Premium $18 3 $20 4 123. The contribution per machine-hour is a. $18 for Standard, $20 for Premium. b. $54 for Standard, $80 for Premium. c. $15 for Standard, $16 for Premium. d. $6 for Standard, $5 for Premium. Register to View AnswerDifficulty: 2 Standard $18 / 3 = $6; Premium $20 / 4 = 5 Objective: 6 Standard $18 3 Premium $20 4 124. If there are 496 machine-hours available per week, how many rockers of each model should Jim Helmer produce to maximize profits? a. 100 units of Standard and 49 units of Premium b. 72 units of Standard and 70 units of Premium c. 100 units of Standard and 70 units of Premium d. 85 units of Standard and 60 units of Premium Register to View AnswerDifficulty: 2 Objective: 6 Standard (100 units x 3mh) + Premium (49 units x 4 mh) = 496 machine-hours of the constrained resource 125. If there are 600 machine-hours available per week, how many rockers of each model should Jim Helmer produce to maximize profits? a. 100 units of Standard and 49 units of Premium b. 72 units of Standard and 70 units of Premium c. 100 units of Standard and 70 units of Premium d. 85 units of Standard and 60 units of Premium Register to View AnswerDifficulty: 2 Objective: 6 Standard (100 units x 3mh) + Premium (70 units x 4 mh) = 580 machine-hours for the current demand Chapter 11 Page 25 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 126 THROUGH 128. Raines Company manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below. Small Medium Large Unit selling price $150 $250 $500 Unit costs: Variable manufacturing (60) (120) (200) Fixed manufacturing (40) (50) (120) Variable selling and administrative (30) (30) (30) Unit profit $ 20 $ 50 $150 Demand in units Machine-hours per unit 20 40 100 The maximum machine-hours available are 6,000 per week. 126. What is the contribution margin per machine-hour for a large chair? a. $5.00 b. $3.00 c. $2.70 d. $1.80 Register to View Answer$500 - $200 - $30 = $270 $270 / 100 = $2.70 Difficulty: 2 Objective: 6 127. Which of the three product models should be produced first if management incorporates a short-run profit maximizing strategy? a. Small chairs b. Medium chairs c. Large chairs d. Either medium or large chairs Register to View AnswerSmall Medium Large Difficulty: 2 ($150 - $60 - $30) = $60 / 20 = $3.00 **highest ($250 - $120 - $30) = $100 / 40 = $2.50 ($500 $200 - $30) = $270 / 100 = $2.70 Objective: 6 128. How many of each product should be produced per month using the short-run profit maximizing strategy? a. b. c. d. Small 0 100 100 100 Medium 120 0 100 20 Large 12 40 0 40 6 Register to View AnswerDifficulty: 3 Objective: Small (100 x 20) + Large (40 x 100) = 6,000 total machine-hours Chapter 11 Page 26 129. When deciding whether to discontinue a segment of a business, managers should focus on a. equipment used by that segment that could become idle. b. reallocation of corporate costs. c. how total costs differ among alternatives. d. operating income per unit of the discontinued segment. Register to View AnswerDifficulty: 3 Objective: 7 130. When deciding whether to discontinue a segment of a business, relevant costs include all EXCEPT a. fixed supervision costs that can be eliminated. b. variable marketing costs per unit of product sold. c. cost of goods sold. d. future administrative costs that will continue. Register to View AnswerDifficulty: 2 Objective: 7 131. Discontinuing unprofitable products will increase profitability a. if the resources no longer required by the discontinued product can be eliminated. b. if capacity constraints are adjusted. c. automatically. d. when a large portion of the fixed costs are unavoidable. Register to View AnswerDifficulty: 2 Objective: 7 132. Camera Corner is considering eliminating Model AE2 from its camera line because of losses over the past quarter. The past three months of information for Model AE2 are summarized below. Sales (1,000 units)$300,000 Manufacturing costs: Direct materials Direct labor ($15 per hour) Total Overhead Operating loss 150,000 60,000 100,000 ($10,000) Overhead costs are 70% variable and the remaining 30% is depreciation of special equipment for model AE2 that has no resale value. If Model AE2 is dropped from the product line, operating income will a. increase by $10,000. b. decrease by $20,000. c. increase by $30,000. d. decrease by $10,000. Register to View AnswerDifficulty: 3 Objective: 7 300,000 - $150,000 - $60,000 - $70,000 = $20,000 This product contributes $20,000 toward corporate profits, therefore, discontinuing this product will decrease operating income by $20,000. Chapter 11 Page 27 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 133 AND 134. The management accountant for Martha s Book Store has prepared the following income statement for the most current year. Cookbook Travel Book Classics Total Sales $60,000 $100,000 $40,000 $200,000 Cost of goods sold 36,000 65,000 20,000 121,000 Contribution margin 24,000 35,000 20,000 79,000 Order and delivery processing 18,000 21,000 8,000 47,000 Rent (per sq. foot used) 2,000 1,000 3,000 6,000 Allocated corporate costs 7,000 7,000 7,000 21,000 Corporate profit $ (3,000) $ 6,000 $ 2,000 $ 5,000 133. If the cookbook product line had been discontinued prior to this year, the company would have reported a. greater corporate profits. b. the same amount of corporate profits. c. less corporate profits. d. resulting profits cannot be determined. Register to View AnswerDifficulty: 3 Objective: 7 $60,000 - $36,000 - $18,000 $2,000 = $4,000 The cookbook product line contributed $4,000 toward corporate profits. Without the cookbooks, corporate profits would be $4,000 less than currently reported. 134. If the travel book line had been discontinued, corporate profits for the current year would have decreased by a. $35,000. b. $14,000. c. $13,000. d. $6,000. Register to View AnswerDifficulty: 3 $100,000 - $65,000 - $21,000 - $1,000 = $13,000 Objective: 7 Chapter 11 Page 28 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 135 AND 136. Denly Company has three products, A, B, and C. The following information is available: Product A Product B Product C Sales $60,000 $90,000 $24,000 Variable costs 36,000 48,000 15,000 CM 24,000 42,000 9,000 Fixed costs: Avoidable 9,000 18,000 6,000 Unavoidable 6,000 9,000 5,400 Operating income $ 9,000 $15,000 $ (2,400) 135. Denly Company is thinking of dropping Product C because it is reporting a loss. Assuming Denly drops Product C and does not replace it, operating income will a. increase by $2,400. b. increase by $3,000. c. decrease by $3,000. d. decrease by $5,400. Register to View AnswerDifficulty: 3 Objective: 7 $24,000 - $15,000 - $6,000 = $3,000. Product C contributes $3,000 toward corporate profits. Without Product C, operating income would be $3,000 less than currently reported. 136. Assuming Product C is discontinued and the space formerly used to produce Product C is rented for $12,000 per year, operating income will a. increase by $6,600. b. increase by $9,000. c. increase by $12,000. d. increase by $14,400. Register to View Answer$(3,000) + $12,000 = $9,000 Difficulty: 3 Objective: 7 Chapter 11 Page 29 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 137 AND 138. Melodee s Preserves currently makes jams and jellies and a variety of decorative jars used for packaging. An outside supplier has offered to supply all of the needed decorative jars. For this make-or-buy decision, a cost analysis revealed the following avoidable unit costs for the decorative jars: Direct materials Direct labor Unit-related support costs Batch-related support costs Product-sustaining support costs Facility-sustaining support costs Total cost per jar $0.25 0.03 0.10 0.12 0.22 0.28 $1.00 137. The relevant cost per jar is a. $0.28 per jar. b. $0.38 per jar. c. $0.72 per jar. d. $1.00 per jar. Register to View AnswerDifficulty: 2 All avoidable costs are relevant for this decision. Objectives: 4, 7 $0.25 0.03 0.10 0.12 0.22 0.28 $1.00 138. The maximum price that Melodee s Preserves should be willing to pay for the decorative jars is a. $0.28 per jar. b. $0.38 per jar. c. $0.72 per jar. d. $1.00 per jar. Register to View AnswerDifficulty: 2 Objectives: 4, 7 Considering only quantitative factors, the company should not pay more than the avoidable costs of $1.00 per jar. There may be qualitative factors that are also important. 139. Costs are relevant to a particular decision if they a. are variable costs. b. are fixed costs. c. differ across the alternatives being considered. d. remain unchanged across the alternatives being considered. Register to View AnswerDifficulty: 2 Objective: 8 Chapter 11 Page 30 140. When deciding to lease a new cutting machine or continue using the old machine, the following costs are relevant EXCEPT the a. $50,000 cost of the old machine. b. $20,000 cost of the new machine. c. $10,000 selling price of the old machine. d. $3,000 annual savings in operating costs if the new machine is purchased. Register to View AnswerDifficulty: 2 Objective: 8 141. For machine-replacement decisions, depreciation is a cost that is a. not relevant. b. differential. c. incremental. d. variable. Register to View AnswerDifficulty: 1 Objective: 8 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 142 THROUGH 144. Flowers For Everyone is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow: Existing van New van Original cost $100,000 $180,000 Annual operating cost $ 35,000 $ 20,000 Accumulated depreciation $ 60,000 --Current salvage value of the existing van $ 45,000 --Remaining life 10 years 10 years Salvage value in 10 years $ 0 $ 0 Annual depreciation $ 4,000 $ 18,000 142. Sunk costs include a. the original cost of the existing van. b. the original cost of the new van. c. the current salvage value of the existing van. d. the annual operating cost of the new van. Register to View AnswerDifficulty: 2 Objective: 8 143. Relevant costs for this decision include a. the original cost of the existing van. b. accumulated depreciation. c. the current salvage value. d. the salvage value in 10 years. Register to View AnswerDifficulty: 2 Objective: 8 Chapter 11 Page 31 144. If Flowers For Everyone replaces the existing delivery van with the new one, over the next 10 years operating income will a. decrease by $180,000. b. increase by $150,000. c. decrease by $150,000. d. none of the above. Register to View AnswerDifficulty: 3 Objective: 8 New van ($20,000 x 10 years) - Existing van ($35,000 x 10 years) = $150,000 less in operating costs, which results in a $150,000 increase in operating income. THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 145 THROUGH 147. Frederick, Inc., is considering replacing a machine. The following data are available: Old Machine $45,000 10 5 $25,000 $8,000 0 $7,000 Replacement Machine $35,000 5 0 0 $4,000 Original cost Useful life in years Current age in years Book value Disposal value now Disposal value in 5 years Annual cash operating costs 145. Which of the data provided in the table is a sunk cost? a. The annual cash operating costs of the old machine b. The annual cash operating costs of the replacement machine c. The disposal value of the old machine d. The original cost of the old machine Register to View AnswerDifficulty: 2 Objective: 8 146. For the decision to keep the old machine, the relevant costs of keeping the old machine total a. $60,000. b. $35,000. c. $47,000. d. $72,000. Register to View Answer$7,000 x 5 = $35,000 Difficulty: 3 Objective: 8 147. The difference between keeping the old machine and replacing the old machine is a. $37,000 in favor of keeping the old machine. b. $12,000 in favor of keeping the old machine. c. $37,000 in favor of replacing the old machine. d. $12,000 in favor of replacing the old machine. Register to View AnswerDifficulty: 3 Objective: New [$35,000 + (5 x $4,000)] Old [$8,000 + (5 x $7,000)] = $12,000 Chapter 11 Page 32 8 148. Managers tend to favor the alternative that makes their performance look best. Therefore, they tend to focus on a. how to implement the chosen alternative. b. the measures used in the decision model. c. the measures used in the performance evaluation model. d. gathering the required information. Register to View AnswerDifficulty: 2 Objective: 9 149. If management takes a multiple-year view in the decision model and judges success according to the current year's results, a problem will occur in the a. decision model. b. performance evaluation model. c. production evaluation model. d. quantitative model. Register to View AnswerDifficulty: 2 Objective: 9 150. The three steps involved in linear programming include all of the following EXCEPT a. determining the objective. b. determining the basic relationship. c. computing the optimal solution. d. determining the relevant and irrelevant costs. Register to View AnswerDifficulty: 2 Objective: A 151. In linear programming, the goals of management are expressed in a. an objective function. b. constraints. c. operating policies. d. business functions. Register to View AnswerDifficulty: 1 Objective: A 152. A mathematical inequality or equality that must be appeased is known as a. an objective function. b. a constraint. c. an operating policy. d. a business function. Register to View AnswerDifficulty: 2 Objective: A Chapter 11 Page 33 153. Computer Products produces two keyboards, Regular and Special. Regular keyboards have a unit contribution margin of $128, and Special keyboards have a unit contribution margin of $720. The demand for Regulars exceeds Computer Product s production capacity, which is limited by available machine-hours and direct manufacturing laborhours. The maximum demand for Special keyboards is 80 per month. Management desires a product mix that will maximize the contribution toward fixed costs and profits. Direct manufacturing labor is limited to 1,600 hours a month and machine-hours are limited to 1,200 a month. The Regular keyboards require 20 hours of labor and 8 machine-hours. Special keyboards require 34 labor-hours and 20 machine-hours. Let R represent Regular keyboards and S represent Special keyboards. The correct set of equations for the keyboard production process is a. Maximize: Constraints: Labor-hours: Machine-hours: Special: Regular: b. Maximize: Constraints: Labor-hours: Machine-hours: Special: Regular: c. Maximize: Constraints: Labor-hours: Machine-hours: Special: Regular: d. Maximize: Constraints: Labor-hours: Machine-hours: Special: Regular: Register to View Answer$128R + $720S 20R + 34S 1,600 8R + 20S 1,200 S 80 S 0 R 0 $128R + $720S 20R + 34S 1,600 8R + 20S 1,200 S 80 S 0 R 0 $720S + $128R 20R + 8S 1,600 34R + 20S 1,200 S 80 S 0 R 0 $128R + $720S 20R + 34S 1,600 8R + 20S 1,200 S 80 S 0 R 0 Difficulty: Ch F eedbackregardingpreviousactionsmayaff : ect A) futurepredictions B) implementationofthedecision C) thedecisionmodel 60) Placethef ollowingstepsfromthefivestepdecision processinorder : A=Makepredictionsaboutfuturecosts B=Evaluateperf mancetoprovidef or eedback C=Implementthedecision D=Chooseanalternative C) ADCB 6 1) Thef malprocessofchoosingbetweenalternativesis or knownasa(n): B) decisionmodel 62) RugglesCircuitCompanymanufacturescircuitboardsf or otherfir ms.Managementisattemptingtosearchf orwaysto reducemanufacturinglaborcostsandhasreceiveda proposalfromaconsultingcompanytorearrangethe productionfloornextyear Usingtheinf mationbelow . or regardingcurrentoperationsandthenewproposal,which ofthef ollowingdecisionsshouldmanagementaccept? Currentl y Proposed Req uiredmachineoperators 5 4.5 Materialshandlingworkers 1 .25 1 .25 Employeeaveragepay $8perhour $9perhour Hoursworkedperemployee 2, 1 00 2,000 B) Rearrangetheproductionfloor . Answerthef ollowingq uestionsusingtheinf mation or below : LeBlancLightingmanufacturessmallflashlightsandis consideringraisingthepriceby50centsaunitf orthe comingyear Witha50centpriceincrease,demandis . expectedtofallby3,000units. Currentl y Projected Demand 20,000units 1 000units 7 , Sellingprice $4.50 $5.00 Incrementalcostperunit $3.00 $3.00 63) Ifthepriceincreaseisimplemented,operatingprofitis projectedto: A) increaseby$4,000 64) Wouldyourecommendthe50centpriceincrease? D) Y es,becauseoperatingprofitsincrease. 65) Whenusingthefivestepdecisionprocess,whichoneof thef ollowingstepsshouldbedonelast? C) Evaluationandf eedback 66) Whenusingthefivestepdecisionprocess,whichoneof thef ollowingstepsshouldbedonefirst? A) Obtaininf mation or 67) F ordecisionmaking,alistingoftherelevantcosts: A) willhelpthedecisionmakerconcentrateonthepertinent data B) willonl yincludefuturecosts C) willonl yincludecoststhatdiff eramongalternatives 68) Sunkcosts: B) arepastcosts 69) Sunkcosts: D) areignoredwhenevaluatingalternatives 70) Acomputersysteminstalledlastyearisanexampleof a(n): A) sunkcost 7 1) CoststhatCANNOTbechangedbyanydecisionmadenowor inthefutureare: D) sunkcosts 7 2) Inevaluatingdiff erentalternatives,itisusefulto concentrateon: D) relevantcosts 7 3) Whichofthef ollowingcostsalwaysdiff eramongfuture alternatives? C) relevantcosts 7 4) Whichofthef ollowingcostsareneverrelevantinthe decisionmakingprocess? B) historicalcosts Answerthef ollowingq uestionsusingtheinf mation or below : Jim's5year oldGeoPrizmreq uiresrepairsestimatedat $3,000tomakeitroadworthyagain.Hisfriend,Julie, suggestedthatheshouldbuya5year oldusedHondaCivic insteadf or$3,000cash.Julieestimatedthef ollowing costsf orthetwocars: GeoPrizm HondaCivic Acq uisitioncost $1 5,000 Repairs $3,000 Annualoperatingcosts (Gas,maintenance,insurance) $3,000 $2,280 $2, 1 00 7 5) ThecostNOTrelevantf orthisdecisionisthe: A) acq uisitioncostoftheGeoPrizm 7 6) WhatshouldJimdo?Whatarehissavingsinthefirst year? C) BuytheHondaCivic;$1 80 7 7) Arelevantrevenueisarevenuethatisa(n): B) futurerevenue 7 8) Arelevantcostisacostthatisa(n): A) futurecost 79) Relevantinf mationhasallofthesecharacteristics or EXCEPT : B) allfuturerevenuesandexpensesarerelevant 80) Quantitativefactors: B) canbeexpressedinmonetaryter ms 8 1) Qualitativefactors: D) includecustomersatisfaction 82) Historicalcostsarehelpful: A) f ormakingfuturepredictions 83) Whenmakingdecisions: C) appropriateweightmustbegiventobothq uantitativeand q ualitativefactors 8 4) EmployeemoraleatDosSantos,Inc.,isveryhigh.This typeofinf mationisknownasa: or A) q ualitativefactor 85) Robertoownsasmallbodyshop.Hisma jorcostsinclude labor ,parts,andrent.Inthedecisionmakingprocess, thesecostsareconsideredtobe: C) q uantitativefactors 86) Onetimeonl yspecialordersshouldonl ybeacceptedif: A) incrementalrevenuesexceedincrementalcosts 8 7) Whendecidingtoacceptaonetimeonl yspecialorderfrom awholesaler ,managementshoulddoallofthef ollowing EXCEPT : D) verifypastdesigncostsf ortheproduct 88) Whenthereisexcesscapacity ,itmakessensetoaccepta onetimeonl yspecialorderf orlessthanthecurrent sellingpricewhen: A) incrementalrevenuesexceedincrementalcosts 89) Fullcostoftheproductis: C) thesumofallvariableandfixedcostsinallthe businessfunctionsofthevaluechain Answerthef ollowingq uestionsusingtheinf mation or below : WelchManufacturingisapproachedbyaEuropeancustomerto fulfillaonetimeonl yspecialorderf oraproductsimilar tooneoff eredtodomesticcustomers.WelchManufacturing hasexcesscapacityThef . ollowingperunitdataappl or yf salestoregularcustomers: V ariablecosts: Directmaterials $40 Directlabor 20 Manufacturingsupport Marketingcosts 1 5 Fixedcosts: Manufacturingsupport Marketingcosts 1 5 35 45 T otalcosts 10 7 Markup(50%) 85 T argetedsellingprice $255 90) Whatisthefullcostoftheproductperunit? B) $1 0 7 9 1) Whatisthecontributionmarginperunit? C) $1 45 92) F orWelchManufacturing,whatistheminimumacceptable priceofthisspecialorder? A) $10 1 93) Whatisthechangeinoperatingprofitsiftheonetime onl yspecialorderf or1 ,000unitsisacceptedf or$1 80a unitbyWelch? A) $70,000increaseinoperatingprofits 9 4) RatzlaffCompanyhasacurrentproductionlevelof20,000 unitspermonth.Unitcostsatthislevelare: Directmaterials $0.25 Directlabor 0.40 V ariableoverhead 0.5 1 Fixedoverhead 0.20 Marketingfixed 0.20 Marketing/distributionvariable 0.40 Currentmonthl ysalesare1 8,000units.JimCompanyhas contactedRatzlaffCompanyaboutpurchasing1 ,500unitsat $2.00each.Currentsaleswouldnotbeaff ectedbytheone timeonl yspecialorder ,andvariablemarketing/distribution costswouldnotbeincurredonthespecialorder Whatis . RatzlaffCompany'schangeinoperatingprofitsifthe specialorderisaccepted? C) $1 ,800increaseinoperatingprofits 95) BlackT oolCompanyhasaproductioncapacityof1 ,500units permonth,butcurrentproductionisonl ,250units.The y1 manufacturingcostsare$60perunitandmarketingcosts are$1 6perunit.DougHalloff erstopurchase250unitsat $7 6eachf orthenextfivemonths.ShouldBlackacceptthe onetimeonl yspecialorderifonl yabsor ptioncostingdata areavailable? D) Y es,sinceoperatingprofitswillmostlikel yincrease. Answerthef ollowingq uestionsusingtheinf mation or below : Grant'sKitchensisapproachedbyMs.T ammyWang,anew customer ,tofulfillalargeonetimeonl yspecialorderf or aproductsimilartooneoff eredtoregularcustomers.The f ollowingperunitdataappl orsalestoregular yf customers: Directmaterials $455 Directlabor 300 V ariablemanufacturingsupport Fixedmanufacturingsupport T otalmanufacturingcosts 900 Markup(60%) 5 40 T argetedsellingprice $140 4 45 1 00 Grant'sKitchenshasexcesscapacityMs.Wangwantsthe . cabinetsincherryratherthanoak ,sodirectmaterial costswillincreaseby$30perunit. 96) F orGrant'sKitchens,whatistheminimumacceptableprice ofthisonetimeonl yspecialorder? A) $830 9 7) Otherthanprice,whatotheritemsshouldGrant'sKitchens considerbef oreacceptingthisonetimeonl yspecialorder? B) reactionofexistingcustomerstothelowerpriceoff ered toMs.Wang 98) IfMs.Wangwantedalongter mcommitmentf orsuppl ying thisproduct,thisanal ysis: A) woulddefinitel ybediff erent 99) Anexampleofaq uantitativefactorf orthedecision makingprocessis: D) manufacturingoverhead 1 00) Iftherewaslimitedcapacity ,allofthef ollowingamounts wouldchangeEXCEPT : C) variablecosts Answerthef ollowingq uestionsusingtheinf mation or below : Northwoodsmanufacturesrusticfurniture.Thecost accountingsystemestimatesmanufacturingcoststobe$90 pertable,consistingof80%variablecostsand20%fixed costs.Thecompanyhassur pluscapacityavailable.Itis Northwoods'policytoadda50%markuptofullcosts. 11) 0 Northwoodsisinvitedtobidonaonetimeonl yspecial ordertosuppl 00rustictables.Whatisthelowestprice y1 Northwoodsshouldbidonthisspecialorder? B) $7 200 , 1 02) Alargehotelchainiscurrentl yexpandingandhasdecided todecorateallnewhotelsusingtherusticsty le. NorthwoodsIncor poratedisinvitedtosubmitabidtothe hotelchain.WhatisthelowestpriceperunitNorthwoods shouldbidonthislongter morder? D) $1 35 1 03) CochranCor porationhasaplantcapacityof1 00,000units permonth.Unitcostsatcapacityare: Directmaterials $4.00 Directlabor 6.00 V ariableoverhead 3.00 Fixedoverhead 1 .00 Marketingfixed .00 7 Marketing/distributionvariable 3.60 Currentmonthl ysalesare95,000unitsat$30.00each. Suzie,Inc.,hascontactedCochranCor porationabout purchasing2,000unitsat$2 4.00each.Currentsaleswould notbeaff ectedbytheonetimeonl yspecialorder Whatis . Cochran'schangeinoperatingprofitsiftheonetimeonl y specialorderisaccepted? A) $1 4,800increase 14) 0 Thesumofallthecostsincurredinaparticular businessfunction(f orexample,marketing)iscalledthe: A) businessfunctioncost 1 05) The sum of all costs incurred in all business functions in the value chain (product design, manufacturing, marketing, and customer service, for example) is known as

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Alabama State - ACCTG - 101
CHAPTER 13: STRATEGY PROFITABILITY ANALYSIS59.Which component measures the changes in operating income attributed solely to an increase in the quantity of output between Year 1 and Year 2? a. The growth component b. The price-recovery component c. The p
Alabama State - ACCTG - 101
CHAPTER 2: AN INTRODUCTION TO COST TERMS AND PURPOSES MULTIPLE CHOICE 37. Cost objects include a. products. b. customers. c. departments. d. all of the above. Answer: 38. d Difficulty: 2 Objective: 1Actual costs are a. the costs incurred. b. budgeted cos
Alabama State - ACCTG - 101
MULTIPLE CHOICE 21. A report that measures financial and nonfinancial performance measures for various organization units in a single report is called a(n) a. balanced scorecard. b. financial report scorecard. c. imbalanced scorecard. d. unbalanced scorec
Alabama State - ACCTG - 101
MULTIPLE CHOICE 21. Which of the following is NOT a characteristic of a management control system? a. It aids and coordinates the process of making decisions. b. It encourages short-term profitability. c. It motivates individuals throughout the organizati
Alabama State - ACCTG - 101
MULTIPLE CHOICE 31. _ describes how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its overall objectives. a. Strategy b. Planning c. Learning and growth perspective d. Customer perspective Answer: 32.
Alabama State - ACCTG - 101
MULTIPLE CHOICE 44. Companies should ONLY produce and sell units as long as a. there is customer demand for the product. b. the competition allows it. c. the revenue from an additional unit exceeds the cost of producing it. d. there is a generous supply o
Alabama State - ACCTG - 101
Answer the following questions using the information below: The Borders Corporation operates one central plant that has two divisions, the Flashlight Division and the Night Light Division. The following data apply to the coming budget year:Assume that pr
Alabama State - ACCTG - 101
[ACCT3104] MANAGERIAL COSTING AND CONTROL (ST LUCIA AND IPSWICH). SEMESTER 2, 2009 (ACCT3104S_5960IPX) > ASSESSMENT > QUIZZES > TAKE ASSESSMENT: QUIZ 1_TOPIC 3Take Assessment: QUIZ 1_Topic 3Name InstructionsQUIZ 1_Topic 3 Please select the most appropr
Alabama State - ACCTG - 101
Multiple Choice Questions 1. _ and _ are typically the measures of volume of activity in traditional volume-based cost systems. A. Practical capacity; products sold B. Direct labor hours; practical capacity C. Direct labor hours; machine hours D. Square f
Alabama State - ACCTG - 101
17: CHAPTER PROCESS COSTING SYSTEMS TRUE/FALSE 1. Examples of industries that would use process costing include the pharmaceutical and semiconductor industry. Answer: 2. True Difficulty: 1 Objective: 1 The principal difference between process costing and
Alabama State - ACCTG - 101
Which of the following is NOT a reason to use the sales value at splitoff method: simplicity no anticipation of subsequent management decisions measurement of the value of the joint products at the splitoff point availability of a common basis to allocate
Alabama State - ACCTG - 101
Howard Community College Cost Accounting 215 Quiz Chapter 14, 15 and 11 THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 1 THROUGH 3. Ednas Flowering Plants provides the following information for the month of May: Actual Tulips Geraniums 1,950 1,800 $11 $18
Alabama State - ACCTG - 101
Question 1 0.1 out of 0.1 points Correct Answer the following questions using the information below: LeBlanc Lighting manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year. With a 50-cent price increase
Alabama State - ACCTG - 101
MULTIPLE CHOICE 48. Which of the following cost(s) are inventoried when using variable costing? a. Direct manufacturing costs b. Variable marketing costs c. Fixed manufacturing costs d. Both (a) and (b) Answer: 49. a Difficulty: 1 Objective: 1 Which of th
Alabama State - ACCTG - 101
MULTIPLE CHOICE 21. What type of cost is the result of an event that results in more than one product or service simultaneously? a. Byproduct cost b. Joint cost c. Main cost d. Separable cost Answer: b Difficulty: 2 Objective: 1 22.All costs incurred beyo
Alabama State - ACCTG - 101
MULTIPLE CHOICE 38. Costs which are not economically feasible to trace but are related to a cost object are known as a. fixed costs. b. direct costs. c. indirect costs. d. variable costs. Answer: c Difficulty: 1 Objective: 1 39.Any item for which a separa
Alabama State - ACCTG - 101
Exam2review Exam2review Thisreviewdoesnotcovereverything,useitwithyourbooks,notes,handouts, andquizzes.Chapter5 Chapter5 Youneedtoknow: Thetraditionalcostingsystem(singleindirect costpoolsystem). OHAllocationrate=?/?. Whatcausesovercostingandundercos
Alabama State - ACCTG - 101
Chapter1 5 36) Themethodthatallocatescostsineachcostpoolusing thesamerateperunitisknownasthe: C) singleratecostallocationmethod 3 7) Thedualratecostallocationmethodclassifiescostsin eachcostpoolintoa: B) variablecostpoolandafixedcostpool 38) Thesinglerate
Alabama State - ACCTG - 101
BA4320 CHAPTER 17PROCESS COSTINGCHAPTER OUTLINEI. Costing systems A. Types 1. Job costing: cost object is a job that constitutes a distinctly identifiable product or service 2. Process costing: process forms basis of costing system B. Principal functio
Alabama State - ACCTG - 101
CHAPTER 14: COST ALLOCATION, CUSTOMER-PROFITABILITY ANALYSIS, AND SALES-VARIANCE ANALYSIS 91. The static-budget variance will be favorable when a. actual unit sales are less than budgeted unit sales. b. the actual contribution margin is greater than the s
Purdue - MA - 250
Math/Stat 250Exam 2March 10, 2009Name: Student ID: Exam time: 50 minutes Books and notes are not allowed on this exam. There is a normal distribution table attached at the end. There are ten questions on ten pages. Make sure that you have all sheets.
UGA - BIOCHEMIST - 8010
UGA - BIOCHEMIST - 8010
Foxit Reader (C) Foxit Software Company,2005-2006 CB 8010 Molecular Cell Biology Fall Semester, 2010 Drs. Cai and Kipreos, Co-course Directors Class Time: Tu/Th 3:30-5:00 pm Classroom: 404A Biological Sciences Building This course is designed to offer a
Western New England University - ACCT - ac101
linegraph andinsert thetrend linewiththe equationto complete the problem. A 16Aug 19 20 21 22 23 26 27 28 29 30 14.45 15.75 16.45 17.4 17.32 15.96 16.45 15.6 15.09 16.42 16.21 15.22 16.03 5.78 6.3 6.58 5.22 5.2 4.79 3.29 3.12 3.02 1.64 1.62 1.52 4.01 6.07
Western New England University - ACCT - ac101
Variables x ObjectiveFunction Constraint1 Constraint2 Constraint3 Constraint40.12 1 6 1ysign 0.09 = 4 1 1profit max35000 240 50000 15000notsurewhattodonext.ImsoryyIhavemissedclasssomuchthispastweekIhave beenveryillandIwenthomeovertheweekend.Iwillcat
Western New England University - ACCT - ac101
Max5x1+5x2 s.t. x16 2x1+3x219 x1x28 x1,x20Variables ObjectiveFunction Constraint1 Constraint2 Constraint3X15 1 2 1 soultions X1 X2 5X2sign 7 = 0 3 1RHS MaxP 6 19 8Profit/cost Constraint1 Constraint2 Constraint346 5 19 8Slack 1 0.00 0.003Variabl
Western New England University - ACCT - ac101
A. Max 10x+5y 5x+2ylessthan/equalto40 xgreaterthan/equalto0 ygreaterthan/equalto0 B. Uncontrollableinputs $5profitperunit 2laborhours 40 laborweek Controllableinputs productionquantity(x,y) C. $10profitperunit 5laborhoursUncontrollableinputs $5profitperu
Western New England University - ACCT - ac101
d=annualdemandforaproductinunits p=priceperunit d=80010p phastobebetween$20and$70 A. $20perunit $70perunit B. TR=dp C. $30 $40 $50 $15,000 $16,000 $15,000 600 100D. Recommendedprice=$40 Revenue $16,000 Demand 400 units
Western New England University - ACCT - ac101
Fixedcosts Variablecosts Demand Sellprice A. productionvolume totalrevenue totalcost totalprofit(loss) B. totalprofit(loss) C. productionvolume totalrevenue totalcost totalprofit(loss) priceperbook80,000.00 3.00 perbook 12,000.00 4,000.00 20.00 perbook 4
Western New England University - ACCT - ac101
priceperbox Fixedcost variable boxes A.100,000 1,500,000 50,000 perbox 50ProductionVolume 30 TotalCost 3,000,000 TotalRevenue 3,000,000 TotalProfit(loss) B. Ithinktheyshouldselltheboxesiftheycanlowertheircostofmakingthemtogetahigherprofit.X Y A. x+y=8
Western New England University - ACCT - ac101
ZhengCompany fixedcosts varcostperunit sellingpriceperunit Whatisthemarginalrevenue Whatisthemarginalcost Whatisthecontributionmargin55,000 85 255 r(x)=255x C(x)=55,000+85x TCM=255x85x revenue 81,600 81,855 82,110 82,365 82,620Whatisthebreakevencalculat
Western New England University - ACCT - ac101
d1 d2 d3 d4S1 14 11 9 8S2 9 10 10 10S3 10 8 10 11S4 5 7 11 13A. MinimaxregretapproachbecauseitcomputesthemaximumregretsoitiseasiertoNOTpickthatoptionsothemaximumregB. Iliketheminimaxapproachbecauseitisagoodwaytomaketherightdecisionratherthanchoosing
Western New England University - ACCT - ac101
DecisionAlternative d1 d2S1 250 100 0.65S2 100 100 0.15S3 25 75 0.2 182.5 95service Fullprice DiscountStrong Weak $960 $(490) $670 $320A. Decision: Choosebetweenafullpricedfleetoradiscountfleetofsmallerjets 2decisionalternatives 4differentoutcomes D
Western New England University - ACCT - ac101
Profit profitability 150,000 0.10 100,000 0.25 50,000 0.20 0 0.15 (50,000) 0.20 (100,000) 0.10 A. B. 30,000ProgramAcceptance High Moderate Poor ProgamAcceptance High Moderate Poor HighWestern MusicalVariety 30% 40% 25% 20% 20% 15% Western Musicalvariety
Western New England University - ACCT - ac101
PlayerAa1 a2 MaxplayerB b18 2 8b25 4 5b37 10 10Min5 2stationAa1 a2 a3 MaxStationB b110 8 4 10b25 8 7 8b33 6 3 6Min5 6 3223x+57(1x)=167x+79(1x) p 0.28 223 103.82 57 = 167 103.82 79 0
Western New England University - ACCT - ac101
run pass maxWNEC run pass Min 3 18 15 0 15 18Springfield College3 0SpringfieldCollegeisonoffenseandWNECisondefense.Pleasedeterminetheoptimalstrategyfor SpringfieldCollge'soffenseandWNEC'sdefense.PleasedeterminethepercentageoftimeSpringfield shouldrunt
Western New England University - ACCT - ac101
Western New England University - ACCT - ac101
Day Price 16Aug $14.45 19Aug $15.75 20Aug $16.45 21Aug $17.40 22Aug $17.32 23Aug $15.96 26Aug $16.45 27Aug $15.60 28Aug $15.09 29Aug $16.42 30Aug $16.21 3Sep $15.22 4Sep$16.27 $16.58 $16.72 $16.55 $16.08 $15.90 $15.95 $15.710.1 0.02 1.25 2.12 0.11 0.09
Western New England University - ACCT - ac101
Period 124am 48am 812noon 124pm 48pm 812midnight 124am 48am 812noon 124pm 48pm 812midnight 124am 48am 812noon 124pm 48pm 124am 48am 812noon 124pm 48pm 124am 48amDeseasonalizedSeasonal IndexAverage Seasonal Index1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1
Western New England University - ACCT - ac101
Variables ObjectiveFunction Constraint1 Constraint2 Constraint3X15 1 2 6X2X149.25sign 2 = (2) 3 (1) Solutions X2RHS MaxP Profit/cost 420 Constraint1 610 Constraint2 125 Constraint3587.25 (291.75) 610.00 125.00170.50Slack 711.75 Variables Object
Western New England University - ACCT - ac101
X2 Variables X1 sign ObjectiveFunction 2,400 1,800 = Constraint1 6 3 Constraint2 1 Constraint3 2 3 Solutions X1 X2 250.0023RHS MaxP Profit/cost 2,100 Constraint1 280 Constraint2 1,000 Constraint3960,000.00 2,100.00 200.00 1,000.00Slack 80.00 200.00M
San Diego - ACCT - 101
I have selected Jeff Skilling Former COO of Enron as my individual of i nterest due to the nature in which he conducted his last few months at the company. Jeff Skilling joined Enron from a competitor McKinley & Company i n 1990, five years after the comp
San Diego - ACCT - 116A
Colin Fleming ACCT 116A 3/24/2009Enron The Guys in the Room Individual of InterestI have selected Jeff Skilling Former COO of Enron as my individual of interest due to the nature in which he conducted his last few months at the company. Jeff Skilling jo
San Diego - ACCT - 101
Colin Fleming ACCT 116AWhy save the American Automakers? It has been difficult to turn on the television, pull up a website or listen to the radio without hearing about the impending bankruptcy of the big three. We all know that the industry itself nearl
Scottsdale Community College - GBS - 120
Colin Fleming Project Group A H1N1 and the Monetary Effects on BusinessOctober, 6, 2009Not only does the flu affect our daily lives and personal well being, it has a huge impact on the P&L statements of businesses throughout the nation. The standard flu
Scottsdale Community College - GBS - 120
Colin Fleming Project Group A Survey Questions H1N1 and the Monetary Effects on Business Monetary effect on prevention, preparation and looking after the H1N1 virus Survey questions directed to various CEOs and my companies CFO: October, 6, 2009What res
Scottsdale Community College - GBS - 120
Colin Fleming Project Group A Survey Questions H1N1 and the Monetary Effects on Business Monetary effect on prevention, preparation and looking after the H1N1 virus Survey questions directed to various CEOs and my companies CFO: October, 6, 2009What res
Scottsdale Community College - MGT - 126
MGT 126 Week 1 Assignments Fleming MGT 126 Week 1: Colin Fleming Assignment #1 Getting Ready for New Employee Orientation on Chapter 1, page 28. Critical Thinking QuestionsColin1. What interpersonal skills do you currently have that will allow you to be
Scottsdale Community College - MGT - 126
MGT 126 Week 1 Assignments Fleming MGT 126 Week 1: Colin Fleming Assignment #1 Getting Ready for New Employee Orientation on Chapter 1, page 28. Critical Thinking QuestionsColin1. What interpersonal skills do you currently have that will allow you to be
Scottsdale Community College - MGT - 126
Colin Fleming - MGT 126 1 Do you think that Mr. Boyle should take Regals past performance record into consideration? Why or why not? I do not believe that Regals past performance record should be taken into consideration, as a customer in this situation i
Scottsdale Community College - MGT - 126
1. In what ways can technology play a role in the delivery of effectivecustomer service? Explain. Technology plays a key role in customer service in the modern era for many reasons, it allows for easy, convenient and quick communication and response, it
Scottsdale Community College - MGT - 179
Purveyor Perfect Business ModelColin Fleming Cheryl Kosloske Keri Toneva MGT 127Mission: Purveyor Perfect is dedicated to being the finest food and beverage delivery organization by providing the finest products at affordable prices with excellent custo
Scottsdale Community College - MGT - 126
Colin Fleming Cheryl Kosloske Keri Toneva Purveyor Perfect: Our industry selected is the food service and delivery industry in which we all have general, working knowledge of. Our team is a business development group, tasked to strategize future direction
Scottsdale Community College - MGT - 179
Colin Fleming MGT 179 Final Project OutlineTalent M anagement: RecruitingRecruitment refers to the process of attracting; screening, and selecting qualified people for a job at an organization or fi rm. For some components of t he recruitment process, m
Scottsdale Community College - MGT - 179
Colin Fleming MGT 179Week 12) What kinds of companies might not be able to utilize UTC-like programs to attract and retain employees? Do these companies have other options available to them? Lower-end companies with typically high turn-over rate, for ex
Scottsdale Community College - MGT - 179
Colin Fleming MGT 179Final Project Topic SelectionWeek 2Recruitment and Marketing I have selected the topic of Recruitment & Marketing in order to better understand the methods in which companies are utilizing to complete staffing requirements. I am pe
Scottsdale Community College - MGT - 179
Colin Fleming MGT 179 Case Study Page 352 Texas Instruments MGT 179 Week 3Week 31) Do you think that TI took the right approach to achieving better customer satisfaction by training its executives first? It is well documented that a customer service ini
Scottsdale Community College - MGT - 179
Colin Fleming - MGT 179 Homework Week 4 Discussion Questions Page 520 Chapter Eleven MGT 179 3) Employers are required by law to provide specific benefits to employees. What laws mandate benefits to employees, and what are the provisions of those laws? So
Scottsdale Community College - MGT - 179
MemorandumDate: 3/28/2010To: Peter WongFrom: Colin Fleming Subject: Self-IntroductionBrief Biography: Marketing Director with record of success driving integrated strategies to develop new/existing customer sales, brand/product evolution and media end
San Diego - BUSE 140 - 140
Marketing Strategy Mission Statement: To be the leading wellness beverage provider using innovative and sustainable techniques. Plan Objectives: The initial goal is to secure the placement in retailers. We will do this by using our relationship with Red B
Scottsdale Community College - MGT - 179
Executive SummaryContact: Company: Email: Phone: Address: Date: Dietrich Mateschitz - CEO Red Bull GmbH Midnight Sheep D.mateschitz@redbull.at.com +43 664 -83 0975554 Seestrasse 1 Fuschl am See, Austria A-5330 www.midnightsheep.com November, 29, 2009FOR