Accounting II Quiz 8 .docx

Is outsourcing the socks when 1 the facilities are

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is outsourcing the socks when (1) the facilities are idle and when (2) the facilities are used to make other  products. (Complete all answer boxes. Enter a zero for any zero amounts.)     Incremental Analysis Make Outsourcing Decision Socks     Plus:     Total cost of producing 20,000 socks   Less:     Net cost   Outsource Socks Facilities Make Other Idle Products                     Just Do It exclamation mark Just Do It!  should    outsource the socks from the supplier and not making other products  make the socks  outsource the socks from the supplier and use the facilities to make other products  because it results in a    higher  lower  net cost to the company. Requirement 3. Assuming  $ 30 comma 000$30,000  of the Lighting Department's direct fixed costs are avoidable, should the store managers discontinue the  Lighting Department? The space currently occupied by the Lighting Department would be replaced with a  Hardware Department that is expected to have sales of  $ 200 comma 000$200,000,  variable costs of 
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$ 80 comma 000$80,000  and new direct fixed costs of  $ 30 comma 000$30,000. Incremental Analysis of Discontinuation Decision   Total     Less:     Income lost if Lighting is discontinued       Less:     Segment margin provided by the Hardware Department   Net benefit of discontinuing the Lighting Department and replacing with a Hardware Department   The store managers    should  should not  discontinue the Lighting Department because the segment margin provided by the Hardware Department    exceeds  is lower than  the income lost if Lighting is discontinued.         More                                                      Less Choose from any list or enter any number in the input fields and then continue to the next question. Which of the following is false? A. Relevant information is always financial in nature. B. Relevant information always regards the future. C. Sunk costs are never relevant to a decision. D. Relevant information always differs among alternatives. Keys to making short-term decisions include which of the following?
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A. Using a contribution margin approach that separates variable costs from fixed costs B. Focusing on relevant revenues, costs, and profits C. Both of the above D. None of the above Which is true of price-setters? A. Their pricing approach emphasizes cost-plus pricing. B. Their pricing approach emphasizes target costing. C. Their products lack uniqueness.
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  • Spring '15
  • Wilkins
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