Exam 3: Using Costs in Decision Making

Sanchez & Ryan, Inc, sells a single product. This year, 20,000 units were sold resulting in $130,000 of sales revenue, $60,000 of variable costs, and $17,500 of fixed costs. -The number of units that must be sold annually to achieve $52,500 of profits is:

(Multiple Choice)

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Question 101

If a company is deciding whether to outsource a part,business-sustaining costs are always unavoidable.

(True/False)

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Question 102

Melodee's Preserves currently makes jams and jellies and a variety of decorative jars used for packaging. An outside supplier has offered to supply all of the needed decorative jars. For this make-or-buy decision, a cost analysis revealed the following avoidable unit costs for the decorative jars: -The relevant cost per jar is:

(Multiple Choice)

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Question 103

EJL Herbal Remedies sells several products for an average price of $17 per unit. Average variable costs per unit are as follows: EJL's annual fixed costs total $82,500. -The number of units that EJL must sell annually to make a profit of $75,000 is:

(Multiple Choice)

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Question 104

Melodee's Preserves currently makes jams and jellies and a variety of decorative jars used for packaging. An outside supplier has offered to supply all of the needed decorative jars. For this make-or-buy decision, a cost analysis revealed the following avoidable unit costs for the decorative jars: -The maximum price that Melodee's Preserves should be willing to pay for the decorative jars is:

(Multiple Choice)

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Question 105

All of the following are assumed in a cost-volume-profit analysis EXCEPT:

(Multiple Choice)

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Question 106

In evaluating different alternatives,it is useful to concentrate on:

(Multiple Choice)

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Question 107

For a particular decision,differential revenues and costs are always relevant.

(True/False)

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Question 108

Sanchez & Ryan, Inc, sells a single product. This year, 20,000 units were sold resulting in $130,000 of sales revenue, $60,000 of variable costs, and $17,500 of fixed costs. -The contribution margin per unit is:

(Multiple Choice)

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Question 109

Kirkland Company manufactures a part for use in its production.When 10,000 units are produced,the costs per unit are: Mike Company has offered to sell to Kirkland Company 10,000 units of the part for $6.00 per unit.The plant facilities could be used to manufacture another item at a savings of $9,000 if Kirkland accepts the offer.In addition,$1.00 per unit of fixed manufacturing support on the original item would be eliminated. Required: a.What is the relevant cost per unit for the original part? b.Which alternative is best for Kirkland Company? By how much?

(Essay)

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Question 110

To perform cost-volume-profit analysis,a company must be able to separate costs into fixed and variable components.

(True/False)

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Question 111

Conecuh Sausage Company is considering replacing its giant sausage mixer with a new one.The following data have been compiled to evaluate the decision. Required: a. What costs are relevant? b. What costs are sunk? c. What are the net cash flows over the next 10 years assuming Conecuh Sausage Company purchases the new sausage mixer?

(Essay)

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Question 112

For general customers,the price charged for a product must cover its long-run cost to the organization.

(True/False)

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Question 113

Jeffrey's,Inc.,sells a single product.The company's most recent income statement is given below. Required: a.Contribution margin ratio is _______ b.Break-even point in total sales dollars is _ c.To achieve $40,000 in net income,sales must total _ d.If sales increase by $50,000 from a $200,000 level, net income will increase by _______

(Essay)

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Question 114

The following annual information is for Bressler Corporation: Total fixed costs: $100,000 -If the sales mix shifts to one unit of Product X and two units of Product Y,then the contribution margin per unit of composite product will:

(Multiple Choice)

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Question 115

Employee morale at Dos Santos,Inc.,is very high.This type of information is known as:

(Multiple Choice)

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Question 116

Skate Magic manufactures three different product lines, Model TS, Model AY, and Model GG. Considerable market demand exists for all models. The following per unit data apply: -How can the Vice-president of sales at Skate Magic encourage her salespeople to promote the more profitable model?

(Multiple Choice)

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Question 117

Which of the following does NOT need to be considered when evaluating a make-or-buy decision?

(Multiple Choice)

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Question 118

Skate Magic manufactures three different product lines, Model TS, Model AY, and Model GG. Considerable market demand exists for all models. The following per unit data apply: -Which model has the greatest contribution margin per machine-hour?

(Multiple Choice)

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Question 119

When evaluating a make-or-buy decision,which of the following does NOT need to be considered?

(Multiple Choice)

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Question 120

Showing 101 - 120 of 128

Sanchez & Ryan, Inc, sells a single product. This year, 20,000 units were sold resulting in $130,000 of sales revenue, $60,000 of variable costs, and $17,500 of fixed costs. -The number of units that must be sold annually to achieve $52,500 of profits is:

If a company is deciding whether to outsource a part,business-sustaining costs are always unavoidable.

EJL Herbal Remedies sells several products for an average price of $17 per unit. Average variable costs per unit are as follows: EJL's annual fixed costs total $82,500. -The number of units that EJL must sell annually to make a profit of $75,000 is:

All of the following are assumed in a cost-volume-profit analysis EXCEPT:

In evaluating different alternatives,it is useful to concentrate on:

For a particular decision,differential revenues and costs are always relevant.

Sanchez & Ryan, Inc, sells a single product. This year, 20,000 units were sold resulting in $130,000 of sales revenue, $60,000 of variable costs, and $17,500 of fixed costs. -The contribution margin per unit is:

To perform cost-volume-profit analysis,a company must be able to separate costs into fixed and variable components.

For general customers,the price charged for a product must cover its long-run cost to the organization.

The following annual information is for Bressler Corporation: Total fixed costs: $100,000 -If the sales mix shifts to one unit of Product X and two units of Product Y,then the contribution margin per unit of composite product will:

Employee morale at Dos Santos,Inc.,is very high.This type of information is known as:

Skate Magic manufactures three different product lines, Model TS, Model AY, and Model GG. Considerable market demand exists for all models. The following per unit data apply: -How can the Vice-president of sales at Skate Magic encourage her salespeople to promote the more profitable model?

Which of the following does NOT need to be considered when evaluating a make-or-buy decision?

Skate Magic manufactures three different product lines, Model TS, Model AY, and Model GG. Considerable market demand exists for all models. The following per unit data apply: -Which model has the greatest contribution margin per machine-hour?

When evaluating a make-or-buy decision,which of the following does NOT need to be considered?

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

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