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MGMT640 1121 Final Exam Spring 2015 Name: __________________________ Date: ___________________ The Final Exam is individual work. All work on the...

Please see word doc attachment…..25 multiple choice questions.
MGMT640 1121 Final Exam Spring 2015 Name: __________________________ Date: ___________________ The Final Exam is individual work. All work on the exam should be from your own efforts, with no assistance from classmates, family, friends or others. By proceeding with this exam, you are agreeing not to share the exam content or your responses with anyone, including future students of MGMT640. Your completed exam is due by 7:00 PM on Sunday, April 26, 2015 (upload to your Final Exam folder under Assignments ). Please refer to the Syllabus for the policy regarding late submissions. There will be no make-up exams except for documented emergencies. You are not required to submit your working. However, complete working showing formulas and calculations may be considered for partial credit for incorrect answers. Identify the letter of the choice that best completes the statement or answers the question. 1. A manufacturing company produces 100,000 units of product A at a total cost of $2.8 million. Total fixed costs are $1.2 million. If the company increases production by 18% and uses a 23% markup the price per unit will be: A) $31.54 B) $32.19 C) $35.47 D) $37.10 Use the following to answer questions 2-3: RNO Company's market for the Model 55 has changed significantly, and RNO has had to drop the price per unit from $225 to $165. There are some units in the work in process inventory that have costs of $200 per unit associated with them. RNO could sell these units in their current state for $150 each. It will cost RNO $50 per unit to complete these units so that they can be sold for $165 each. 2. A new employee looks at the analysis and exclaims, “We'll lose money with either of these alternatives! Let's just throw these units in the trash!” Suppose the alternative to trashing is choosing the more profitable of the two alternatives (that the new employee looked at and did not like). What effect will the trashing option (that the new employee wants) have on net income? A) Net income will increase by $35 per unit for each unit discarded. B) Net income will decrease by $265 per unit for each unit discarded. C) Net income will decrease by $150 per unit for 1
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each unit discarded. D) It will have no effect on net income. 3. When the incremental revenues and expenses are analyzed, the company is better off by A) $10 per unit if they sell the units in their current state. B) $25 per unit if they sell the units in their current state. C) $115 per unit if they complete the units. D) $15 per unit if they complete the units. 4. A company using activity based pricing marks up the direct cost of goods by 43% plus charges customers for indirect costs based on the activities utilized by the customer. Indirect costs are charged as follows: $8.00 per order placed; $4.00 per separate item ordered; $30.00 per return. A customer places 10 orders with a total direct cost of $3,000, orders 300 separate items, and makes 6 returns. What will the customer be charged? A) $5,750 B) $3,000 C) $5,330 D) $4,290 5. Manufacturing overhead is allocated to products based on the number of machine hours required. In a year when 20,000 machine hours were anticipated, costs were budgeted at $125,000. If a product requires 7,000 machine hours, how much manufacturing overhead will be allocated to this product? A) $41,667 B) $42,850 C) $51,120 D) $43,750 Use the following to answer questions 6-7: The Sunrise Hotel has 200 rooms. Each room rents at $110 per night and variable costs total $16 per room per night of occupancy. Fixed costs total $84,000 per month. 6. If the hotel spends an additional $10,000 in the month of February on advertising they feel that they can expect occupancy rate to increase by 5%. What would be the financial impact of spending this additional money on advertising for the month of February (28 days)? A) Total fixed costs will increase by $10,500. B) Net income will increase by $26,320. C) Net income will increase by $16,320. D) Total fixed costs will remain the same. 7. If 80% of the rooms are occupied each night in the month of February (28 days) what will total costs be for the month? 2
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A manufacturing company produces 100,000 units of product A at a total cost of $2.8 million. Total fixed costs are $1.2 million. If the company increases production by 18% and uses a 23% markup...

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