Question 1

Costs incurred in the past to acquire an asset are referred to as _________________________.

Accepted Answer

The answer of Costs incurred in the past to acquire...

Question 2

In linear programming,a ______________________________ represents the overachievement of a minimum requirement.

Accepted Answer

The answer of In linear programming,a ______________________________ represents the overachievement...

Question 3

Under what circumstances is the sum of variable production and selling costs the appropriate minimum price for special orders?

Accepted Answer

Variable costs would serve as the bottom

Question 4

Edmond Corporation has been manufacturing 5,000 units of Part 10541,which is used in the manufacture of one of its products.At this level of production,the cost per unit of manufacturing Part 10541 is as follows:   Arcadia Company has offered to sell Edmond 5,000 units of Part 10541 for $19 a unit.Edmond has determined that it could use the facilities currently used to manufacture Part 10541 to manufacture Part RAC and generate an operating profit of $4,000.Edmond has also determined that two-thirds of the fixed overhead applied will continue even if Part 10541 is purchased from Arcadia.To determine whether to accept Arcadia's offer,the net relevant costs to make are

Accepted Answer

A) $70,000. 
B) $84,000. 
C) $90,000. 
D) $95,000. 
A) $70,000. 
B) $84,000. 
C) $90,000. 
D) $95,000.

Question 5

Ezell Company has 20,000 units in inventory that had a production cost of $4 per unit.These units cannot be sold through normal channels due to a significant technology change.These units could be reworked at a total cost of $30,000 and sold for $35,000.Another alternative is to sell the units to a junk dealer for $10,500.The relevant cost for Ezell to consider in making its decision is

Accepted Answer

A) $80,000 of original product costs. 
B) $30,000 for reworking the units. 
C) $110,000 for reworking the units. 
D) $35,000 for selling the units to the junk dealer. 
A) $80,000 of original product costs. 
B) $30,000 for reworking the units. 
C) $110,000 for reworking the units. 
D) $35,000 for selling the units to the junk dealer.

Question 6

Kenwood Electronics Corporation Kenwood Electronics Corporation manufactures and sells FM radios.Information on the prior year's operations (sales and production Model A1)is presented below:
  Refer to Kenwood Electronics Corporation.Assume that the remaining Model A1 radios can be sold through normal channels or to a foreign buyer for $6 per unit.If sold through regular channels,the minimum acceptable price will be

Accepted Answer

A) $30. 
B) $33. 
C) $10. 
D) $4. 
A) $30. 
B) $33. 
C) $10. 
D) $4.

Question 7

An increase in direct fixed costs could reduce all of the following except

Accepted Answer

A) product line contribution margin. 
B) product line segment margin. 
C) product line operating income. 
D) corporate net income. 
A) product line contribution margin. 
B) product line segment margin. 
C) product line operating income. 
D) corporate net income.

Question 8

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  3,000
Refer to Majestic Corporation.A solution of X = 500 and Y = 600 would violate

Accepted Answer

A) Constraint 1. 
B) Constraint 2. 
C) both constraints. 
D) neither constraint. 
A) Constraint 1. 
B) Constraint 2. 
C) both constraints. 
D) neither constraint.

Question 9

Memory Division of Missing Byte,Inc. The Memory Division of Missing Byte,Inc.produces a high-quality computer chip.Unit production costs (based on capacity production of 100,000 units per year)follow:
  Refer to Memory Division of Missing Byte,Inc.Assume,for this question only,that the Memory Division is presently operating at a level of 80,000 chips per year.Accepting a "special order" on 2,000 chips at $88 will

Accepted Answer

A) increase total corporate profits by $4,000. 
B) increase total corporate profits by $20,000. 
C) decrease total corporate profits by $14,000. 
D) decrease total corporate profits by $24,000. 
A) increase total corporate profits by $4,000. 
B) increase total corporate profits by $20,000. 
C) decrease total corporate profits by $14,000. 
D) decrease total corporate profits by $24,000.

Question 10

Tripoli Corporation manufactures batons.Tripoli can manufacture 300,000 batons a year at a variable cost of $750,000 and a fixed cost of $450,000.Based on Tripoli's predictions,240,000 batons will be sold at the regular price of $5.00 each.In addition,a special order was placed for 60,000 batons to be sold at a 40 percent discount off the regular price.The unit relevant cost per unit for Tripoli's decision is

Accepted Answer

A) $1.50. 
B) $2.50. 
C) $3.00. 
D) $4.00. 
A) $1.50. 
B) $2.50. 
C) $3.00. 
D) $4.00.

Question 11

The management of Hepner Industries has been evaluating whether the company should continue manufacturing a component or buy it from an outside supplier.A $100 cost per component was determined as follows:
   Hepner Industries uses 4,000 components per year.After Goudge Corporation submitted a bid of $80 per component,some members of management felt they could reduce costs by buying from outside and discontinuing production of the component.If the component is obtained from Goudge Corporation,Hepner Industries' unused production facilities could be leased to another company for $50,000 per year.
Required:

Accepted Answer

The answer of The management of Hepner Industries has been...

Question 12

In linear programming,resource constraints are usually expressed as inequalities.

Accepted Answer

A) True 
 B)False

Question 13

Galveston Pipe Corporation The capital budgeting committee of the Galveston Pipe Corporation is evaluating the possibility of replacing its old pipe-bending machine with a more advanced model.Information on the existing machine and the new model follows:
  Refer to Galveston Pipe Corporation.The major opportunity cost associated with the continued use of the existing machine is

Accepted Answer

A) $30,000 of annual savings in operating costs. 
B) $20,000 of salvage in 5 years on the new machine. 
C) lost sales resulting from the inefficient existing machine. 
D) $400,000 cost of the new machine. 
A) $30,000 of annual savings in operating costs. 
B) $20,000 of salvage in 5 years on the new machine. 
C) lost sales resulting from the inefficient existing machine. 
D) $400,000 cost of the new machine.

Question 14

One constraint in an LP problem is: 12X + 7Y > 4,000.If the optimal solution is X = 100 and Y = 500,this resource has

Accepted Answer

A) slack variable of 700. 
B) surplus variable of 700. 
C) output coefficient of 700. 
D) none of the above. 
A) slack variable of 700. 
B) surplus variable of 700. 
C) output coefficient of 700. 
D) none of the above.

Question 15

The relative product quantities composing a company's total sales is referred to as a company's _________________________.

Accepted Answer

The answer of The relative product quantities composing a company's...

Question 16

Henke Company has only 30,000 hours of machine time each month to manufacture its two products.Product X has a contribution margin of $60,and Product Y has a contribution margin of $72.Product X requires 6 hours of machine time,and Product Y requires 10 hours of machine time.If Thomas Company wants to dedicate 85 percent of its machine time to the product that will provide the most income,the company will have a total contribution margin of

Accepted Answer

A) $216,000 
B) $228,600. 
C) $287,400 
D) $300,000 
A) $216,000 
B) $228,600. 
C) $287,400 
D) $300,000

Question 17

When multiple products are produced and sold,a change in the sales price of one product may cause a change in the sales mix of the firm.

Accepted Answer

A) True 
 B)False

Question 18

Atlanta Motors Atlanta Motors is trying to decide whether it should keep its existing car washing 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 Atlanta Motors.The estimated $500 salvage value of the existing machine in 10 years represents a(n)

Accepted Answer

A) sunk cost. 
B) opportunity cost of selling the existing machine now. 
C) opportunity cost of keeping the existing machine for 10 years. 
D) opportunity cost of keeping the existing machine and buying the new machine. 
A) sunk cost. 
B) opportunity cost of selling the existing machine now. 
C) opportunity cost of keeping the existing machine for 10 years. 
D) opportunity cost of keeping the existing machine and buying the new machine.

Question 19

The excess of revenues over direct variable expenses and avoidable fixed expenses is referred to as ______________________________.

Accepted Answer

The answer of The excess of revenues over direct variable...

Question 20

Fixed costs are ignored in allocating scarce resources because

Accepted Answer

A) they are sunk. 
B) they are unaffected by the allocation of scarce resources. 
C) there are no fixed costs associated with scarce resources. 
D) fixed costs only apply to long-run decisions. 
A) they are sunk. 
B) they are unaffected by the allocation of scarce resources. 
C) there are no fixed costs associated with scarce resources. 
D) fixed costs only apply to long-run decisions.

Costs incurred in the past to acquire an asset are referred to as _________________________.

In linear programming,a ______________________________ represents the overachievement of a minimum requirement.

Under what circumstances is the sum of variable production and selling costs the appropriate minimum price for special orders?

An increase in direct fixed costs could reduce all of the following except

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.A solution of X = 500 and Y = 600 would violate

In linear programming,resource constraints are usually expressed as inequalities.

One constraint in an LP problem is: 12X + 7Y > 4,000.If the optimal solution is X = 100 and Y = 500,this resource has

The relative product quantities composing a company's total sales is referred to as a company's _________________________.

When multiple products are produced and sold,a change in the sales price of one product may cause a change in the sales mix of the firm.

The excess of revenues over direct variable expenses and avoidable fixed expenses is referred to as ______________________________.

Fixed costs are ignored in allocating scarce resources because

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 10: Relevant Information for Decision Making

Costs incurred in the past to acquire an asset are referred to as _________________________.

In linear programming,a ______________________________ represents the overachievement of a minimum requirement.

Under what circumstances is the sum of variable production and selling costs the appropriate minimum price for special orders?

An increase in direct fixed costs could reduce all of the following except

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.A solution of X = 500 and Y = 600 would violate

In linear programming,resource constraints are usually expressed as inequalities.

One constraint in an LP problem is: 12X + 7Y > 4,000.If the optimal solution is X = 100 and Y = 500,this resource has

The relative product quantities composing a company's total sales is referred to as a company's _________________________.

When multiple products are produced and sold,a change in the sales price of one product may cause a change in the sales mix of the firm.

The excess of revenues over direct variable expenses and avoidable fixed expenses is referred to as ______________________________.

Fixed costs are ignored in allocating scarce resources because

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters