Corn Crunchers has three product lines.Its only unprofitable line is Corn Nuts, the results of which appear below for 2016: \[\begin{array} { l r } \text { Sales } & \$ 350,000 \\ \text { Variable expenses } & 230,000 \\ \text { Fixed expenses } & \underline { 180,000 } \\ \text { Net loss } & \$ ( 60,000 ) \end{array}\] If this product line is eliminated, 30% of the fixed expenses can be eliminated.How much are the relevant costs in the decision to eliminate this product line?

A) $54,000 B) $410,000 C) $335,000 D) $284,000 A) $54,000 B) $410,000 C) $335,000 D) $284,000

Hari's Fish House can produce and sell only one of the following two products: \[\begin{array} { l c c } & \begin{array} { c } \text { Fryer } \\ \text { Fried catfish } \end{array} & \begin{array} { c } \text { Contribution } \\ \text { Margin Per Unit } \end{array} \\ \text { Fried catfish } & 3 & \$ 15 \\ \text { Fried grouper } & 4 & \$ 16 \end{array}\] The company has fryer capacity of 12,000 hours.How much will the contribution margin be if it produces only the most profitable product?

A) $48,000 B) $36,000 C) $60,000 D) $12,000 A) $48,000 B) $36,000 C) $60,000 D) $12,000

Exam 7: Incremental Analysis

Halliburton Division has the following data: Sales \ 500,000 Variable expenses 240,000 Fixed expenses 280,000 The fixed costs are not avoidable and must be allocated to profitable divisions if the segment is eliminated.What will be the incremental effect on net income if Halliburton Division is eliminated?

(Multiple Choice)

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Question 101

Corn Crunchers has three product lines.Its only unprofitable line is Corn Nuts, the results of which appear below for 2016: Sales \ 350,000 Variable expenses 230,000 Fixed expenses Net loss \ (60,000) If this product line is eliminated, 30% of the fixed expenses can be eliminated.How much are the relevant costs in the decision to eliminate this product line?

(Multiple Choice)

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Question 102

Which of the following statements about making decisions is correct?

(Multiple Choice)

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Question 103

Which statement is true of an opportunity cost?

(Multiple Choice)

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Question 104

Equipment which is NOT fully depreciated should always be replaced.

(True/False)

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Question 105

A special one-time order is acceptable if the unit sales price is greater than the unit variable cost.

(True/False)

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Question 106

In deciding on the future status of an unprofitable segment, management should recognize that net income will increase by eliminating the unprofitable segment.

(True/False)

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Question 107

Namov Company has old inventory on hand that cost $12,000.Its scrap value is $16,000.The inventory could be sold for $38,000 if manufactured further at an additional cost of $12,000.What should Narst do?

(Multiple Choice)

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Question 108

A company decided to replace an old machine with a new machine.Which of the following is considered a relevant cost?

(Multiple Choice)

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Question 109

Hari's Fish House can produce and sell only one of the following two products: Fryer Fried catfish Contribution Margin Per Unit Fried catfish 3 \ 15 Fried grouper 4 \ 16 The company has fryer capacity of 12,000 hours.How much will the contribution margin be if it produces only the most profitable product?

(Multiple Choice)

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Question 110

Rosen, Inc.has 10,000 obsolete calculators, which are carried in inventory at a cost of $20,000.If the calculators are scrapped, they can be sold for $1.10 each (for parts).If they are repackaged, at a cost of $15,000, they could be sold to toy stores for $2.50 per unit.What alternative should be chosen, and why?

(Multiple Choice)

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Question 111

It costs Lannon Fields $14 of variable costs and $6 of allocated fixed costs to produce an industrial trash can that sells for $30.A buyer in Mexico offers to purchase 3,000 units at $18 each.Lannon has excess capacity and can handle the additional production.What effect will acceptance of the offer have on net income?

(Multiple Choice)

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Question 112

In a decision to keep or replace old equipment, the salvage value of the old equipment is a sunk cost in incremental analysis.

(True/False)

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Question 113

The elimination of an unprofitable product line will always increase the total profits of a company.

(True/False)

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Question 114

Showing 101 - 114 of 114

Which of the following statements about making decisions is correct?

Which statement is true of an opportunity cost?

Equipment which is NOT fully depreciated should always be replaced.

A special one-time order is acceptable if the unit sales price is greater than the unit variable cost.

In deciding on the future status of an unprofitable segment, management should recognize that net income will increase by eliminating the unprofitable segment.

Namov Company has old inventory on hand that cost $12,000.Its scrap value is $16,000.The inventory could be sold for $38,000 if manufactured further at an additional cost of $12,000.What should Narst do?

A company decided to replace an old machine with a new machine.Which of the following is considered a relevant cost?

In a decision to keep or replace old equipment, the salvage value of the old equipment is a sunk cost in incremental analysis.

The elimination of an unprofitable product line will always increase the total profits of a company.

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Activity-Based Costing

Decision-Making: Costvolumeprofit

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

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