Exam 17: Activity Resource Usage Model and Tactical Decision Making

In the activity resource model, flexible resources are

Which of the following items would be classified as committed resources (long-term)?

The U.S.government has set up foreign trade zones (FTZ) that

In order for costs or benefits to be relevant, what must be true?

A decision to make a component internally versus through a supplier is a

Gundy Company manufactures a product with the following costs per unit at the expected production of 30,000 units: The company has the capacity to produce 40,000 units.The product regularly sells for $40.A wholesaler has offered to pay $32 a unit for 2,000 units. If the firm is at capacity and the special order is accepted, the effect on operating income would be

Which of the following costs is NOT relevant for special decisions?

Which of the following statement is true concerning the nature of tactical decisions?

Rippey Corporation manufactures a single product with the following unit costs for 5,000 units: Recently, a company approached Rippey Corporation about buying 1,000 units for $225.Currently, the models are sold to dealers for $412.50.Rippey's capacity is sufficient to produce the extra 1,000 units.No additional selling expenses would be incurred on the special order. Required:

Miller Company produces speakers for home stereo units.The speakers are sold to retail stores for $30.Manufacturing and other costs are as follows: The variable distribution costs are for transportation to the retail stores.The current production and sales volume is 20,000 per year.Capacity is 25,000 units per year. - An Atlanta wholesaler has proposed to place a special one-time order for 7,000 units at a special price of $25.20 per unit.The wholesaler would pay all distribution costs, but there would be additional fixed selling and administrative costs of $6,000.In addition, assume that overtime production is not possible and that all other information remains the same as the original data.What is the effect on profits if the special order is accepted?

For flexible resources, which of the following statements is true?

Which of the following is NOT a way that companies might reduce tariffs?

The following information relates to a product produced by Creamer Company: Fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold.Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year.The product normally sells for $120 each.A customer has offered to buy 60,000 units for $90 each. If the firm produces the special order, the effect on income would be a

The operations of Smits Corporation are divided into the Childs Division and the Jackson Division.Projections for the next year are as follows: Operating income for Smits Corporation as a whole if the Jackson Division were dropped would be

How is understanding of committed resources and flexible resources important to the activity resource usage model? How does this relate to relevance?

Stars Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process.The joint costs amount to $200,000. - If Product B2 is processed further, profits will

Reggie Corporation manufactures a single product with the following unit costs for 1,000 units: Recently, a company approached Reggie Corporation about buying 100 units for $5,100 each.Currently, the models are sold to dealers for $7,800.Reggie Corporation's capacity is sufficient to produce the extra 100 units.No additional selling expenses would be incurred on the special order. What is the profit earned by Reggie Corporation on the original 1,000 units?

_______________ is(are) the cost of acquiring activity capacity.

Tactical decision making relies

The use of relevant cost data to identify the alternative that provides the greatest benefit to the organization describes