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Test Review Questions

Test Review Questions - a.70,000 = 20,000 40,000 10,000...

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Test Review Questions Monday, March 28, 2011 9:42 AM a.159 #6, 7 / p. 162 #20 #6 Mfg Costs MAKE BUY DM 2.00 DL 2.40 BUY: 7.75 [ choice C] VOHD 1.60 FOHD 1.00 FOHD: 1.00 Marketing Costs V 2.50 .75 (30% of 2.50) F 1.50 1.50 Total \$11.00 \$11.00 #7 A B C D CM/unit 8 7 10 11 Units/Hour 8 7 5 6 64 49 50 66 [choice D] #20 Mfg Cost MAKE BUY DM 30,000 DL 13,000 BUY: 78,000 [choice C] VOHD 32,000 FOHD 12,000 9000 87,000 87,000 Example 7-10 100,000 splits off to p12 50,000 costs another 100,000 but can be sold 190,000 p14 10,000 costs another 30,000 but can be sold for 35,000 p15 60,000 costs another 150,000 but can be sold for 220,000

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total = \$120,000 p12 P14 p16 Incremental Revenues: 140,000 25,000 160,000 Incremental Costs: (100,000) (30,000) 150,000 Incremental Profit: 40,000 (5000) 10,000 a.20,000 = 120,000 - 100,000 b. 65,000 = 20,000 + 40,000 - 5000 + 10,000
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Unformatted text preview: a.70,000 = 20,000 + 40,000 + 10,000 Example 7-14 • Ignoring taxes and time value of money Keep Old Replace with New Operating Costs 24,000 x 5 = (120,000) Purchase new 25,000 Sell Old 5000 Operating Costs 18,000 x 5 = 90,000 120,000 110,000 • Replacing saves \$10,000 Example 7-15 • If segment margin is positive, keep the division X Erie Sales 100,000-VC CGS (60,000) Op Expenses (25,000) CM 15,000-Direct FC (0) Segment Margin 15,000 • costing \$15,000 Total with all 6 divisions - profit = \$133,240 If you eliminate Erie… Sales 1,664,200-CGS (978,520 + 16,500 = 995,020) Gross Profit 669,180-Op Expenses (527,940 + 23,000 = 550,940) Net Income 118,240 with only 5 divisions MAKING LESS - by 15,000 = segment margin...
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Test Review Questions - a.70,000 = 20,000 40,000 10,000...

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