Exam 4: Fundamentals of Cost Analysis for Decision Making

Zurek Inc has 5,400 machine hours available each month.The following information on the company's three products is available: The market demand is limited to 2,000 units of each of the three products.How many units of each should Zurek produce and sell?

Zurek Inc has 5,400 machine hours available each month.The following information on the company's three products is available: The market demand is limited to 2,000 units of each of the three products.What is the maximum possible contribution margin that Zurek could make in any month?

Miller Industries has two divisions: the West Division and the East Division.Information relating to the divisions for the year just ended is as follows: Common fixed expenses have been allocated equally to each of the two divisions.Miller's segment margin for the West Division is

Roswell Inc has 5,400 machine hours available each month.The following information on the company's three products is available: If market demand exceeds the available capacity,in what sequence should orders be filled to maximize the company's profits?

The operations of Superior Corporation are divided into the Northrup Division and the Hawley Division.Projections for the next year are as follows: Operating income for Superior Corporation,as a whole,if the Hawley Division were dropped would be

The CJP Company produces 10,000 units of item S10 annually at a total cost of $190,000. The XYZ Company has offered to supply 10,000 units of S10 per year for $18 per unit.If CJP accepts the offer,$4 per unit of the fixed overhead would be saved.In addition,some of CJP's facilities could be rented to a third party for $15,000 per year.What are the relevant costs for the "make" alternative?

Exporting a product to another country at a price below domestic cost:

Buffalo Industries produces two products.Information about the products is as follows:

Which of the following statements regarding special orders is (are)false? (A)The primary decision for special orders is determining whether the differential revenue is greater than the differential costs associated with the order. (B)The differential analysis approach to pricing for special orders will always lead to underpricing in the long-run because fixed costs are not included in the analysis.

In the short-run,plant capacity is fixed and product choices have to be made that optimize the use of available capacity.

The MNK Company has gathered the following information for a unit of its most popular product: The above cost information is based on 4,000 units.A foreign distributor has offered to buy 1,000 units at a price of $16 per unit.This special order would not disturb regular sales.Variable shipping and other selling expenses would be an additional $1 per unit for the special order.If the special order is accepted,MNK's operating profits will increase by: