Question 1

Future costs that differ between alternatives.

Accepted Answer

The answer of Future costs that differ between alternatives....

Question 2

Which of the following statements regarding a decision to keep existing equipment or replace it is false?

Accepted Answer

A)  The disposal value of the old equipment is irrelevant. 
B)  The book value of the old equipment is irrelevant. 
C)  The cost of the new equipment is relevant. 
D)  Depreciation on the new equipment is relevant. 
A)  The disposal value of the old equipment is irrelevant. 
B)  The book value of the old equipment is irrelevant. 
C)  The cost of the new equipment is relevant. 
D)  Depreciation on the new equipment is relevant.

Question 3

Unit costs not computed on the same volume basis should not be compared.

Accepted Answer

A) True 
 B)False

Question 4

Mann Corporation has a joint process, which produces three products, A, B and C. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $125,000. Other relevant data are as follows:
  
-In processing Product C further,

Accepted Answer

A)  profits will decrease by $7,000. 
B)  incremental profits will exceed incremental costs. 
C)  profits will increase by $25,000. 
D)  the additional revenue produced will exceed the additional costs. 
A)  profits will decrease by $7,000. 
B)  incremental profits will exceed incremental costs. 
C)  profits will increase by $25,000. 
D)  the additional revenue produced will exceed the additional costs.

Question 5

Amortization on old or new equipment is irrelevant information.

Accepted Answer

A) True 
 B)False

Question 6

The point where products become distinguishable after passing through a common process.

Accepted Answer

The answer of The point where products become distinguishable after...

Question 7

Book value is defined as

Accepted Answer

A)  disposal value. 
B)  disposal value less accumulated depreciation. 
C)  cost less accumulation depreciation. 
D)  disposal value less original cost. 
A)  disposal value. 
B)  disposal value less accumulated depreciation. 
C)  cost less accumulation depreciation. 
D)  disposal value less original cost.

Question 8

Speck Company manufactures a part for its production cycle. The costs per unit for 10,000 units of this part are as follows:
   The fixed factory overhead costs are unavoidable.
-Assume that Speck can buy 10,000 units of the part from another producer for $30 each. The facilities currently used to make the part could be rented out to another manufacturer for $40,000 a year. Speck should

Accepted Answer

A)  make the part as that would save $2 per unit. 
B)  buy the part as that would save $6 per unit. 
C)  buy the part as that would save $2 per unit. 
D)  make the part as that would save $6 per unit. 
A)  make the part as that would save $2 per unit. 
B)  buy the part as that would save $6 per unit. 
C)  buy the part as that would save $2 per unit. 
D)  make the part as that would save $6 per unit.

Question 9

All fixed costs are irrelevant and only variable costs are relevant to the decision-making process.

Accepted Answer

A) True 
 B)False

Question 10

The management of Hillsboro Industries is evaluating whether the company should continue manufacturing a component or buy it from an outside supplier. Based upon their accounting records, it appears that it costs the company $80 per unit to make the component. The $80 cost per component was determined as follows:   Hillsboro Industries uses 10,000 components per year. After Ricardo Inc. submitted a bid of $70 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 Ricardo Inc., $5 of fixed manufacturing overhead per unit would be avoided and Hillsboro's unused production facilities could be leased to another company for $30,000 per year.
Based upon relevant cost differences, should Hillsboro Industries make or buy the component? Include your supporting calculations.

Accepted Answer

@#IMG-DLM& There is a $40,000 difference

Question 11

Differential cost is a synonym for

Accepted Answer

A)  detrimental cost. 
B)  opportunity cost. 
C)  accidental cost. 
D)  incremental cost. 
A)  detrimental cost. 
B)  opportunity cost. 
C)  accidental cost. 
D)  incremental cost.

Future costs that differ between alternatives.

Which of the following statements regarding a decision to keep existing equipment or replace it is false?

Unit costs not computed on the same volume basis should not be compared.

Mann Corporation has a joint process, which produces three products, A, B and C. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $125,000. Other relevant data are as follows: -In processing Product C further,

Amortization on old or new equipment is irrelevant information.

The point where products become distinguishable after passing through a common process.

Book value is defined as

All fixed costs are irrelevant and only variable costs are relevant to the decision-making process.

Differential cost is a synonym for

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Measurement of Cost Behaviour

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters

Exam 9: Relevant Information and Decision Making: Production Decisions

Future costs that differ between alternatives.

Which of the following statements regarding a decision to keep existing equipment or replace it is false?

Unit costs not computed on the same volume basis should not be compared.

Mann Corporation has a joint process, which produces three products, A, B and C. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $125,000. Other relevant data are as follows: -In processing Product C further,

Amortization on old or new equipment is irrelevant information.

The point where products become distinguishable after passing through a common process.

Book value is defined as

All fixed costs are irrelevant and only variable costs are relevant to the decision-making process.

Differential cost is a synonym for

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Measurement of Cost Behaviour

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Capital Budgeting Decisions

The Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters