iClicker_041311_and_selected_CH_12_slide

iClicker_041311_and_selected_CH_12_slide - On Relevant...

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Unformatted text preview: On Relevant Costs Which of the following cash flows is relevant in a decision about accepting Alternative X or Alternative Y? A.A cash inflow for Alternative X that is not a cash inflow for Alternative Y. B.A cash inflow that is lost if Alternative X is accepted and is not lost if Alternative Y is accepted. C.A cash outflow that is avoided if Alternative X is accepted and is not avoided if Alternative Y is accepted. D.All of these. Convery - Spring 2011 1 On dropping a division Consider the following statements: I. A division’s NOI, after deducting both traceable and allocated common corporate costs, is negative. II. The division’s avoidable fixed costs exceed its contribution margin. III. The division’s traceable fixed costs plus its allocated common corporate costs exceed its contribution margin. Which of the above statements give an economic reason for eliminating the division? A. Only I B. Only II C. Only III D. Only I and III Convery - Spring 2011 2 On joint products Products X and Y are made in a joint process with production costs of $200,000. At the split- off point 70,000 units of Y are available. Y can be either sold at the split-off point for $2.60 per unit or processed further and sold for $5.80 per unit, if $2.30 of additional processing costs are incurred. If Y is processed further, the impact on monthly NOI will be: A. $137,000 decrease B . $63,000 increase Convery - Spring 2011 3 On constrained resources Big Co. makes three products that all pass through a stamping machine which is a constrained resource. The company would make the most profit if it produces the product(s) that: A. uses the lowest number of stamping machine hoursA....
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iClicker_041311_and_selected_CH_12_slide - On Relevant...

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