An example of a qualitative factor for the decision

33) An example of a qualitative factor for the decision-making process is ________
A) customer satisfaction as determined by written responses given by customers to survey
questions
B) employee wages paid this week
C) number of clicks on a web site during a month
D) manufacturing overhead allocated to WIP
Answer: A
Diff: 1
Objective: 2
AACSB: Analytical thinking
34) Dantley's Furniture manufactures rustic furniture. The cost accounting system
estimates manufacturing costs to be $190 per table, consisting of 80% variable costs and
20% fixed costs. The company has surplus capacity available. It is Back Forrest's policy to
add a 45% markup to full costs. Dantley's Furniture is invited to bid on a one-time-only
special order to supply 180 rustic tables. What is the lowest price Dantley's Furniture
should bid on this special order?
B
Diff: 2
Objective: 2
AACSB: Application of knowledge
35) Dantley's Furniture manufactures rustic furniture. The cost accounting system
estimates manufacturing costs to be $240 per table, consisting of 75% variable costs and
25% fixed costs. The company has surplus capacity available. It is Back Forrest's policy to
add a 45% markup to full costs. A large hotel chain is currently expanding and has decided
to decorate all new hotels using the rustic style. Dantley's Furniture Incorporated is invited
to submit a bid to the hotel chain. What is the lowest price per unit Dantley's Furniture
should bid on this long-term order?
D
Diff: 2

Objective: 2
AACSB: Application of knowledge
36) Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at
capacity are:
Direct materials $6.00
Direct labor 5.00
Variable overhead 4.00
Fixed overhead 2.00
Marketing—fixed 6.00
Marketing/distribution—variable 4.60
Current monthly sales are 190,000 units at $30.00 each. Q, Inc., has contacted Zephram
Corporation about purchasing 2,500 units at $24.00 each. Current sales would not be
affected by the one-time-only special order. What is Zephram's change in operating profits
if the one-time-only special order is accepted?
A
Diff: 3
Objective: 2
AACSB: Application of knowledge

37) Which of the following is not true about one-time-only special orders?
A) special orders would be accepted if they result in an increase in the contribution margin
regardless of capacity and long-term implications
B) along with other criteria, there must be excess capacity to accept an order
C) along with other criteria, there must not be significant long-term negative implications
of accepting a special order
D) the impact on operating income of the acceptance of a special-order must be analyzed
by management before making a final decision
Answer: A
Diff: 1
Objective: 2
AACSB: Analytical thinking