MULTIPLE_CHOICE_EXAMPLES_CHAPTER_11_Solutions

MULTIPLE_CHOICE_EXAMPLES_CHAPTER_11_Solutions -...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
MULTIPLE CHOICE EXAMPLES CHAPTER 11 20. Gill, Inc. is considering using stocks of an old raw material in a special project. The special project would require all 80 kilograms of the raw material that are in stock and that originally cost the company $500 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $7.50 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $5.75 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $30.00 for all 80 kilograms. What is the relevant cost of the 80 kilograms of the raw material when deciding whether to proceed with the special project? A) $430 B) $480 C) $500 D) $460 Ans: A Discounted price of $5.75 per kg x 80kg = $460 $460 - $30 delivery price = $430 Use the following information to answer 2-3 The following are the DShen Company’s unit costs of making and selling an item at a volume of 1,000 units per month (which represents the company’s capacity): Manufacturing: Direct Materials… $1.50 Direct Labor… $1.00 Variable overhead… $1.00 Fixed overhead… $0.80 Selling and Administrative… Variable… $3.00 Fixed… $1.75 Present sales amount to 800 units per month. An order has been received from a customer in a foreign market for 100 units. The order would not affect current sales. Jensen’s total fixed costs,
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This homework help was uploaded on 02/19/2009 for the course AEM 3230 taught by Professor Little,j.e. during the Spring '08 term at Cornell University (Engineering School).

Page1 / 4

MULTIPLE_CHOICE_EXAMPLES_CHAPTER_11_Solutions -...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online