Kay’s Practice Problems

Kay’s Practice Problems - Kays Practice...

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Kay’s Practice Problems 1. Which statements give an economic reason to eliminate the division? a. A divisions net operating income, after deducting both traceable and allocated common corporation costs, is negative b. The divisions fixed costs exceed its contribution margin c. The divisions tracable fixed costs plus its allocated common corporate costs exceed its contribution margin 2. Sell or Process Further? What is not relevant? a. Available production cost incurred prior to split off b. Available production cost incurred after split off c. An available fixed production cost incurred after split off 3. A special project requires all 240 kg of the raw materials in stock with a cost = $2,112. If the company bought new supplies it would cost 9.25 per kg. There is no other use for the raw material they have and would sell it at a discounted price of 8.35 each and a delivery cost would be incurred of 71.00. What is the relevant cost? 4.
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Kay’s Practice Problems - Kays Practice...

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