Exam 10: Relevant Information for Decision Making

Contracting with vendors outside the organization to obtain or acquire goods and/or services is called

Pittman and Associates,CPA's provides two types of services: audit and tax.All company personnel can perform either service.In efforts to market its services,the company relies on radio and billboards for advertising.Information on the company's projected operations for the coming year follows:

Ralph Parrish operates a woodworking shop that makes tables and chairs.He has 25 employees working 40 hours per week,and he has 750 hours per week available in machine time.Parrish knows that he must make at least four chairs for every table.He has also determined the following additional requirements: Write the objective function and constraints for the above problem.

Majestic Corporation In the two following constraint equations,X and Y represent two products (in units)produced by the Majestic Corporation. Constraint 1: 3X + 5Y < 4,200 Constraint 2: 5X + 2Y > 3,000 Refer to Majestic Corporation.What is the feasible range for the production of Y?

The objective in solving the linear programming problem is to determine the optimal levels of the

Brooklyn Bakers Brooklyn Bakers is trying to decide whether it should keep its existing bread-making machine or purchase a new one that has technological advantages (which translate into cost savings)over the existing machine.Information on each machine follows: Refer to Brooklyn Bakers.The $5,000 of annual operating costs that are common to both the old and the new machine are an example of a(n)

In linear programming,a surplus variable represents overachievement of minimum requirements.

The Robinson-Patman Act prohibits companies from pricing products at different levels when there are no significant differences in production costs.

For a particular product in high demand,a company decreases the sales price and increases the sales commission.These changes will not increase

Minimization of contribution margin is a common objective function in linear programming.

When a company has work performed by an external supplier,it is engaging in ____________________.

Travers Corporation is working at full production capacity producing 10,000 units of a unique product,RST.Manufacturing costs per unit for RST follow: The unit manufacturing overhead cost is based on a variable cost per unit of $2 and fixed costs of $30,000 (at full capacity of 10,000 units).The non-manufacturing costs,all variable,are $4 per unit,and the selling price is $20 per unit.A customer,Blanding Company,has asked Travers to produce 2,000 units of a modification of RST to be called XYZ.XYZ would require the same manufacturing processes as RST.Blanding Company has offered to share equally the non-manufacturing costs with Travers.XYZ will sell at $15 per unit. Required:

The graphical approach to solving a linear programming problem becomes much more complex when there are more than two

Why is depreciation expense irrelevant to most managerial decisions,even when it is a future cost?

Lawson Company produces a part that has the following costs per unit: Crest Corporation can provide the part to Lawson for $19 per unit.Lawson Company has determined that 60 percent of its fixed overhead would continue if it purchased the part.However,if Lawson no longer produces the part,it can rent that portion of the plant facilities for $60,000 per year.Lawson Company currently produces 10,000 parts per year.Which alternative is preferable and by what margin?

In a make or buy decision,the reliability of a potential supplier is

Which of the following activities within an organization would be least likely to be outsourced?

Phoenix Corporation makes and sells the "Desert Icon",a wall hanging depicting a magical cactus plant.The Desert Icons are sold at specialty shops for $50 each.The capacity of the plant is 15,000 Icons.Costs to manufacture and sell each wall hanging are as follows: Phoenix Corporation has been approached by a Oklahoma company about purchasing 2,500 Desert Icons.The company is currently making and selling 15,000 per year.The Oklahoma company wants to attach its own state label,which increases costs by $.50 each.No selling expenses would be incurred on this order.The corporation believes that it must make an additional $1 on each Desert Icon to accept this offer.

In evaluating the profitability of a specific organizational segment,all ____ would be ignored.

Waldrup Corporation Waldrup Corporation sells a product for $21 per unit,and the standard cost card for the product shows the following costs: Refer to Waldrup Corporation.Waldrup received a special order for 1,200 units of the product.The only additional cost to Waldrup would be foreign import taxes of $2 per unit.If Waldrup is able to sell all of the current production domestically,what would be the minimum sales price that Waldrup would consider for this special order?