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# Replacement cost 80000 net realizable value less

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Replacement cost \$ 80,000 Net realizable value less profit margin 85,000 Weighted average cost 90,000 Net realizable value 100,000 Using this LCM approach, the company should value its inventory at a. \$80,000. b. \$85,000. c. \$90,000. d. \$100,000.

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449 59. During its first month of operations, a company manufactured 10,000 units of finished goods, incurring \$100,000 of direct material costs, \$75,000 of direct labor costs, and \$125,000 of manufacturing overhead. During the month, the company sold 8,000 units for \$60 each. What is the company’s throughput contribution margin? a. \$400,000. b. \$380,000. c. \$340,000. d. \$240,000. 60. A company produces products simultaneously through a refining process costing \$186,000. The joint products, Alpha and Beta, have selling prices of \$8 and \$20 per pound, respectively, after additional processing costs of \$4 per pound of each product are incurred after the split-off point. Omega, a by-product, is sold at the split-off point for \$6 per pound. The number of pounds produced is shown below. Alpha 10,000 pounds Beta 5,000 pounds Omega 1,000 pounds Assuming the company inventories Omega, the joint cost allocated to Alpha using the sales value at split-off method is a. \$72,000. b. \$80,000. c. \$82,666. d. \$100,000. 61. A company reported the following cost information for the last fiscal year when it produced 100,000 units. Direct labor \$200,000 Direct materials 100,000 Manufacturing overhead 200,000 Selling and administrative expenses 150,000 All costs are variable except for \$100,000 of manufacturing overhead and \$100,000 of selling and administrative expenses. Using flexible budgeting, what are the total costs associated with producing and selling 110,000 units? a. \$450,000. b. \$650,000. c. \$695,000. d. \$715,000.
450 62. A company’s master budget for the year planned that the company would manufacture and sell 2,000 units for €500,000 in sales, €350,000 in variable expenses, and €45,000 in fixed expenses. If the company only manufactured and sold 1,750 units during the year, how much is the company’s flexible budget operating income? a. €42,500. b. €86,250. c. €91,875. d. €105,000. 63. A company’s management is planning on making an investment of \$800,000 to launch a new product. In the first year, the new product is expected to generate sales of \$200,000 and a contribution margin of \$175,000. Incremental fixed costs are \$50,000. The company’s expected return on investment in the first year is closest to a. 6%. b. 16%. c. 22%. d. 25%. 64. Which one of the following statements best describes the concept of continuous improvement when developing standard costs? a. Standards become more challenging as time passes. b. Standards are developed with zero slack or downtime factored into the calculation. c. Standards remain unattainable to encourage employees to strive harder. d. Standards are established at an easily attainable level to increase employee morale.

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451 65. A company has two service departments, S1 and S2, and two production departments, P1 and P2. Departmental data for January is shown below. S1 S2 Costs incurred \$27,000 \$18,000 Service provided to: S1 0% 20% S2 10% 0% P1 50% 30% P2 40% 50% What are the total allocated service department costs to P2 if the company uses the reciprocal method of allocating its service department costs?
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