Question 1

Because depreciation is a fixed cost that is $\textbf{    not     }$  avoidable,it is irrelevant in making an outsourcing decision.

Accepted Answer

A) True 
 B)False  True

Question 2

Pueblo Production Company manufactures 50,000 high-definition televisions each year.Pueblo is considering purchasing the glass screens from an outside source rather than producing them internally.The following data relate to the glass screens:
   Should Pueblo purchase or produce the screens,and what is the savings associated with the decision?

Accepted Answer

A)  Purchase the screens and save $157,100 
B)  Produce the screens and save $157,100 
C)  Produce the screens and save $207,500 
D)  Purchase the screens and save $207,500 
A)  Purchase the screens and save $157,100 
B)  Produce the screens and save $157,100 
C)  Produce the screens and save $207,500 
D)  Purchase the screens and save $207,500 B

Question 3

Given the following data,what is the total relevant cost of internal production of 2,000 products?

Accepted Answer

A)  $34,000 
B)  $40,000 
C)  $48,000 
D)  $49,000 
A)  $34,000 
B)  $40,000 
C)  $48,000 
D)  $49,000 B

Question 4

Murphy's,Inc.has the following production and cost data for two of its products,Standard and Deluxe:
   A total of 80,000 hours is available each period for the production of the two products.The demand for both products is strong and Murphy will be able to sell as many of either product as it can produce.Ignoring qualitative issues,which of the two products should Murphy produce?

Accepted Answer

Standard $60/2 = $30 contribution margin

Question 5

A type of analysis that helps decision makers understand the impact of their choices is referred to as incremental analysis.

Accepted Answer

A) True 
 B)False

Question 6

Toyota, a Japanese company, has a manufacturing plant in Canton, Mississippi. If Toyota were to contract with Ford Motor Company to manufacture its autos at a Ford plant in the United States, this would be an example of

Accepted Answer

A) Offshoring 
B) Outsourcing 
C) Offshore outsourcing 
D) None of these ans choices are correct. 
A) Offshoring 
B) Outsourcing 
C) Offshore outsourcing 
D) None of these ans choices are correct.

Question 7

Range Rider Industries manufactures chairs and tables that are in high demand by local office furniture stores.Following is information for each of these products:

Range Rider has 900 machine hours available each month.The demand for chairs is 560

Accepted Answer

A) 562 Tables and 0 Chairs 
B)  340 Tables and 222 Chairs. 
C)  340 Tables and 560 Chairs. 
D)  562 Chairs and 0 Tables. 
A) 562 Tables and 0 Chairs 
B)  340 Tables and 222 Chairs. 
C)  340 Tables and 560 Chairs. 
D)  562 Chairs and 0 Tables.

Question 8

The formula for calculating the contribution margin per constrained resource is Contribution Margin Per Unit divided by Units Produced.

Accepted Answer

A) True 
 B)False

Question 9

A company can increase its throughput by which of the following actions?

Accepted Answer

A) Increasing sales 
B) Decreasing costs. 
C) Either by increasing sales or decreasing costs. 
D) Neither by increasing sales nor by decreasing costs. 
A) Increasing sales 
B) Decreasing costs. 
C) Either by increasing sales or decreasing costs. 
D) Neither by increasing sales nor by decreasing costs.

Question 10

Sanderson's Woodworking Company is considering the addition of a new line of quilt frames to its current product lines.If the new quilt frames are added to Sanderson's production,contribution margin of the other products is expected to drop by $2,000.Sanderson has summarized the projected revenue and cost for the new line of frames.
   
a.If Sanderson adds the new quilt frame to its line of products,what will be the increase in operating income?
b.What are three issues that Sanderson should consider before adding the new line?

Accepted Answer

a.
@#IMG-DLM&  b.	Sanderson should consider the de

Question 11

When a customer requests a special order and the supplier has capacity constraints,reducing the special order is $\textbf{      not    }$ normally an option.

Accepted Answer

A) True 
 B)False

Question 12

Mantle,Inc.produces two types of wooden mallets,Ash and Oak,in its Miami factory.Data relating to the mallets are given below: 
   A total of 600 hours are available in the Miami facility.

a.How many hours will be required to satisfy the demand for both products?
b.How much of each product should be produced to maximize Mantle's operating income?

Accepted Answer

a.
 @#IMG-DLM& Total

Question 13

The costs that should be included in an outsourcing decision are the:

Accepted Answer

A) Fixed costs. 
B) Variable costs. 
C) Unavoidable costs. 
D) Relevant costs. 
A) Fixed costs. 
B) Variable costs. 
C) Unavoidable costs. 
D) Relevant costs.

Question 14

If the unit cost of direct materials is $20, direct labor is $12, variable overhead is $2, avoidable fixed costs are $6,000, unavoidable fixed costs are $5,000 and sunk costs are $9,000, what is the total relevant cost for 300 products?

Accepted Answer

A)  $15,200 
B)  $16,200 
C)  $24,200 
D)  $25,200 
A)  $15,200 
B)  $16,200 
C)  $24,200 
D)  $25,200

Question 15

Newport Manufacturing makes and sells backyard fire pits. Each fire pit regularly sells for $269. The following cost data per unit are based on a full capacity of 3,000 fire pits produced each period.
 
Newport is negotiating a special order for the sale of 75 fire pits to an overseas customer who is located in a country that does not have civil liberties for its population. The only selling cost that would be incurred on the special order would be a $10 sales commission. Newport is expected to make 2,500 fire pits before the special order.

Required:

a.	What is the minimum selling price Newport should negotiate for the special order?

b.	What are three factors other than relevant costs that Newport should consider concerning this special order?

Accepted Answer

a.[$100 + $75 + $64 x .75 + $10] = $@#LAT-DLM&  mi

Question 16

Which of the following statements is true?

Accepted Answer

A) If the segment margin is negative,the segment should be retained. 
B) If the segment margin is negative,it should remain in operation until a better use can be found for its resources. 
C) If the segment margin is negative,it should file for bankruptcy. 
D) If the segment margin is negative,the operation should be dropped. 
A) If the segment margin is negative,the segment should be retained. 
B) If the segment margin is negative,it should remain in operation until a better use can be found for its resources. 
C) If the segment margin is negative,it should file for bankruptcy. 
D) If the segment margin is negative,the operation should be dropped.

Question 17

The option of accepting a special order should always be chosen if the price exceeds the relevant costs to produce and deliver the order to the customer.

Accepted Answer

A) True 
 B)False

Question 18

According to the theory of constraints,which of the following is not a step required to maximize and improve the performance of a value chain?

Accepted Answer

A) Identify the constraint. 
B) Compare the constraints with industry averages. 
C) Decide how to exploit the constraint. 
D) Elevate the performance of the constraint. 
A) Identify the constraint. 
B) Compare the constraints with industry averages. 
C) Decide how to exploit the constraint. 
D) Elevate the performance of the constraint.

Question 19

Vista Industries manufactures 75,000 digital cameras each year.Vista has been producing the lenses internally.However,late last year the company received an offer to produce the 150,000 lenses the company uses each year for a total contract price of $380,000.When Vista manufactures the lenses internally,direct materials cost $1.05 per lens,direct labor is $.65 per lens,and variable overhead is $.30 per lens.Vista's total overhead is $110,000.If the lens were purchased,$28,000 of fixed overhead could be avoided.Should Vista purchase or produce the lenses,and what is the savings associated with the decision?

Accepted Answer

A)  Purchase the lenses and save $52,000 
B)  Produce the lenses and save $52,000 
C)  Purchase the lenses and save $2,000 
D)  Produce the lenses and save $2,000 
A)  Purchase the lenses and save $52,000 
B)  Produce the lenses and save $52,000 
C)  Purchase the lenses and save $2,000 
D)  Produce the lenses and save $2,000

Question 20

A company can increase its throughput by which of the following actions?

Accepted Answer

A) Decreasing sales. 
B) Increasing costs. 
C) Either by decreasing sales or by increasing costs. 
D) Neither by decreasing sales nor by increasing costs. 
A) Decreasing sales. 
B) Increasing costs. 
C) Either by decreasing sales or by increasing costs. 
D) Neither by decreasing sales nor by increasing costs.

Because depreciation is a fixed cost that is $\textbf{ not }$ avoidable,it is irrelevant in making an outsourcing decision.

Given the following data,what is the total relevant cost of internal production of 2,000 products?

A type of analysis that helps decision makers understand the impact of their choices is referred to as incremental analysis.

Toyota, a Japanese company, has a manufacturing plant in Canton, Mississippi. If Toyota were to contract with Ford Motor Company to manufacture its autos at a Ford plant in the United States, this would be an example of

Range Rider Industries manufactures chairs and tables that are in high demand by local office furniture stores.Following is information for each of these products: Range Rider has 900 machine hours available each month.The demand for chairs is 560

The formula for calculating the contribution margin per constrained resource is Contribution Margin Per Unit divided by Units Produced.

A company can increase its throughput by which of the following actions?

When a customer requests a special order and the supplier has capacity constraints,reducing the special order is $\textbf{ not }$ normally an option.

The costs that should be included in an outsourcing decision are the:

If the unit cost of direct materials is $20, direct labor is $12, variable overhead is $2, avoidable fixed costs are $6,000, unavoidable fixed costs are $5,000 and sunk costs are $9,000, what is the total relevant cost for 300 products?

Which of the following statements is true?

The option of accepting a special order should always be chosen if the price exceeds the relevant costs to produce and deliver the order to the customer.

According to the theory of constraints,which of the following is not a step required to maximize and improve the performance of a value chain?

A company can increase its throughput by which of the following actions?

Accounting As a Tool for Management

Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters

Exam 8: Using Accounting Information to Make Managerial Decisions

Because depreciation is a fixed cost that is not \textbf{ not } not avoidable,it is irrelevant in making an outsourcing decision.

Given the following data,what is the total relevant cost of internal production of 2,000 products?

A type of analysis that helps decision makers understand the impact of their choices is referred to as incremental analysis.

Toyota, a Japanese company, has a manufacturing plant in Canton, Mississippi. If Toyota were to contract with Ford Motor Company to manufacture its autos at a Ford plant in the United States, this would be an example of

Range Rider Industries manufactures chairs and tables that are in high demand by local office furniture stores.Following is information for each of these products: Range Rider has 900 machine hours available each month.The demand for chairs is 560

The formula for calculating the contribution margin per constrained resource is Contribution Margin Per Unit divided by Units Produced.

A company can increase its throughput by which of the following actions?

When a customer requests a special order and the supplier has capacity constraints,reducing the special order is not \textbf{ not } not normally an option.

The costs that should be included in an outsourcing decision are the:

If the unit cost of direct materials is $20, direct labor is $12, variable overhead is $2, avoidable fixed costs are $6,000, unavoidable fixed costs are $5,000 and sunk costs are $9,000, what is the total relevant cost for 300 products?

Which of the following statements is true?

The option of accepting a special order should always be chosen if the price exceeds the relevant costs to produce and deliver the order to the customer.

According to the theory of constraints,which of the following is not a step required to maximize and improve the performance of a value chain?

A company can increase its throughput by which of the following actions?

Accounting As a Tool for Management

Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters

Because depreciation is a fixed cost that is $\textbf{ not }$ avoidable,it is irrelevant in making an outsourcing decision.

When a customer requests a special order and the supplier has capacity constraints,reducing the special order is $\textbf{ not }$ normally an option.