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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.
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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