(TCO 6) Which of the following statements about cost pools is not
(TCO 6) The building maintenance department for Jones Manufacturing Company
budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are
allocated to two production departments. The following data relate to the potential allocation bases:
(TCO 7) A company is currently making a necessary component in house (the company is
producing the component for its own use). The company has received an offer to buy the component from an outside
supplier. A machine is being rented to make the component. If the company were to buy the component, the machine
would no longer be rented. The rent on the machine, in relation to the decision to make or buy the component, is:
(TCO 7) Ricket Company has 1,500 obsolete calculators that are carried in inventory at a
cost of $13,200. If these calculators are upgraded at a cost of $9,500, they could be sold for $22,500. Alternatively,
the calculators could be sold "as is" for $9,000. What is the net advantage or disadvantage of reworking the
(TCO 7) YXZ Company’s market for the Model 55 has changed significantly, and YXZ has
had to drop the price per unit from $275 to $135. There are some units in the work in process inventory that have
costs of $160 per unit associated with them. YXZ could sell these units in their current state for $100 each. It will cost
YXZ $10 per unit to complete these units so that they can be sold for $135 each.
(TCO 3) What are transferred-in costs? Which departments will never have transferred-in
(TCO 7) Computer Boutique sells computer equipment and home office furniture.
Currently, the furniture product line takes up approximately 50% of the company's retail floor space. The president of
Computer Boutique is trying to decide whether the company should continue offering furniture or just concentrate on
computer equipment. If furniture is dropped, salaries and other direct fixed costs can be avoided. In addition, sales of
computer equipment can increase by 13%. Allocated fixed costs are assigned based on relative sales.
(TCO 4) The following monthly data are available for RedEx, which produces only one
product that it sells for $84 each. Its unit variable costs are $28 and its total fixed expenses are $64,960. Sales during
April totaled 1,600 units.