Question 1

What is the maximum contribution margin the company can earn per month?

Accepted Answer

A) $64,536 
B) $41,464 
C) $37,560 
D) $45,428 
A) $64,536 
B) $41,464 
C) $37,560 
D) $45,428 D

Question 2

How many units of product H98V should be produced each month?

Accepted Answer

A) 0 
B) 831 
C) 170 
D) 440 
A) 0 
B) 831 
C) 170 
D) 440 C

Question 3

Ockerman Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. For example, the selling price of product A31N is $144.00 and its unit variable cost is $115.20. One unit of the product requires 6 ounces of the constrained resource. Monthly sales are 5,700 units. What is the profitability index for product A31N?

Accepted Answer

A) $24.00 per ounce 
B) $164,160 
C) 0.20 
D) $4.80 per ounce 
A) $24.00 per ounce 
B) $164,160 
C) 0.20 
D) $4.80 per ounce D

Question 4

The opportunity cost of using one unit of the constrained resource in a volume trade-off decision is equal to:

Accepted Answer

A) the profitability index for the company's most profitable existing product. 
B) the profitability index for the company's least profitable product-even if none of the product is currently being made. 
C) the profitability index for the product whose production would be cut back if necessary. 
D) the profitability index of the product with the greatest sales. 
A) the profitability index for the company's most profitable existing product. 
B) the profitability index for the company's least profitable product-even if none of the product is currently being made. 
C) the profitability index for the product whose production would be cut back if necessary. 
D) the profitability index of the product with the greatest sales.

Question 5

How many units of product K36L should be produced each month?

Accepted Answer

A) 192 
B) 430 
C) 905 
D) 0 
A) 192 
B) 430 
C) 905 
D) 0

Question 6

A company that makes horsehair cowboy belts cannot meet the demand for belts due to a limited supply of artisans who know how to make the belts. To determine which models of the cowboy belts should be emphasized, the company should rank the models by the amount of time an artisan requires to make the model.

Accepted Answer

A) True 
 B)False

Question 7

How many units of product L33Y should be produced each month?

Accepted Answer

A) 0 
B) 2,868 
C) 712 
D) 1,500 
A) 0 
B) 2,868 
C) 712 
D) 1,500

Question 8

Huddleston Corporation is considering the following six long-term projects:   Only $63,800 is available for investment in these projects.
Required:
a. Determine which projects should be accepted.
b. Determine the total net present value of all of the accepted projects if your plan from part (a) above is adopted.

Accepted Answer

a. Rank the projects on the ba

Question 9

What is the maximum contribution margin the company can earn per month?

Accepted Answer

A) $22,568 
B) $25,676 
C) $24,010 
D) $35,000 
A) $22,568 
B) $25,676 
C) $24,010 
D) $35,000

Question 10

Heiskell Corporation has provided the following data concerning its two products:   The profitability index for product F78P is closest to:

Accepted Answer

A) 0.74 
B) 0.30 
C) $6.00 per gram 
D) 0.59 
A) 0.74 
B) 0.30 
C) $6.00 per gram 
D) 0.59

Question 11

Lachapelle Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. The company has provided the following data for product A97B:   What is the profitability index for product A97B?

Accepted Answer

A) $8.10 per minute 
B) $1,270,080 
C) 0.30 
D) $27.00 per minute 
A) $8.10 per minute 
B) $1,270,080 
C) 0.30 
D) $27.00 per minute

Question 12

The management of Kezar Corporation is reviewing its policies concerning compensation of salespersons. The company has four products that use the same constrained resource. Data concerning those products appear below:   The company does not have enough of the constrained resource to satisfy for demand of all four products.
Required:
a. If salespersons are paid commissions that are a set percentage of sales, which product would they prefer to sell? In other words, if it is a choice between selling one unit of one product and one unit of another, which product would they prefer to sell?
b. From the standpoint of the entire company, if it is a choice between sales of one unit of one product versus another, which product should the salespersons emphasize?

Accepted Answer

a. If the salespersons are paid commissi

Question 13

Heilmann Corporation would like to determine the relative profitability of a number of jobs. For example, job S96T has revenues of $68,000 and avoidable costs of $54,400, resulting in an incremental profit of $13,600. The job requires 170 hours of the constrained resource. The job is responsible for 10% of the company's total profit for the period. What is the profitability index for job S96T?

Accepted Answer

A) 0.20 
B) $400 per hour 
C) $80 per hour 
D) 0.10 
A) 0.20 
B) $400 per hour 
C) $80 per hour 
D) 0.10

Question 14

Beatie Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. For illustration, the company has provided the following data for product K56L:   What is the profitability index for product K56L?

Accepted Answer

A) 0.40 
B) $28.00 per gram 
C) $11.20 per gram 
D) $1,256,640 
A) 0.40 
B) $28.00 per gram 
C) $11.20 per gram 
D) $1,256,640

Question 15

Kleppe Corporation has two products that use the same constrained resource-a critical raw material.   The total amount of the constrained resource available is 10,000 grams.
Required:
a. Which product is most profitable, given the company's constraint?
b. How much of each product should be produced?
c. What is the total contribution margin if your plan in part (b) above is followed?
d. The company is considering launching a new product whose variable cost is $106 and that requires 7 grams of the constrained resource. What is the minimum selling price for the new product?

Accepted Answer

a. Computation of the profitability inde

Question 16

How many units of product E01W should be produced each month?

Accepted Answer

A) 450 
B) 2,151 
C) 0 
D) 1,130 
A) 450 
B) 2,151 
C) 0 
D) 1,130

Question 17

Saska Corporation has four different products that use the same constrained resource. Data concerning those products appear below:   The company does not have enough of the constrained resource to satisfy for demand of all four products. From the standpoint of the entire company, if it is a choice between sales of one unit of one product versus another, which product should the salespersons emphasize?

Accepted Answer

A) B100 
B) B300 
C) B200 
D) B400 
A) B100 
B) B300 
C) B200 
D) B400

Question 18

How many units of product I90J should be produced each month?

Accepted Answer

A) 1,460 
B) 0 
C) 760 
D) 280 
A) 1,460 
B) 0 
C) 760 
D) 280

Question 19

Esquerra Corporation has provided the following data concerning its two products-T85 and G34:   The total amount of the constrained resource available each month is 146,300 grams. Each unit of product T85 requires 19 grams of the constrained resource and each unit of product G34 requires 11 grams. What is the maximum contribution margin the company can earn per month?

Accepted Answer

A) $1,337,600 
B) $1,145,320 
C) $1,178,760 
D) $1,170,400 
A) $1,337,600 
B) $1,145,320 
C) $1,178,760 
D) $1,170,400

Question 20

Up to how much should the company be willing to pay to obtain enough of the constrained resource to satisfy demand for the two existing products?

Accepted Answer

A) $44.80 per minute 
B) $14.40 per minute 
C) $7.20 per minute 
D) $2.80 per minute 
A) $44.80 per minute 
B) $14.40 per minute 
C) $7.20 per minute 
D) $2.80 per minute

What is the maximum contribution margin the company can earn per month?

How many units of product H98V should be produced each month?

The opportunity cost of using one unit of the constrained resource in a volume trade-off decision is equal to:

How many units of product K36L should be produced each month?

How many units of product L33Y should be produced each month?

What is the maximum contribution margin the company can earn per month?

Heiskell Corporation has provided the following data concerning its two products: The profitability index for product F78P is closest to:

Lachapelle Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. The company has provided the following data for product A97B: What is the profitability index for product A97B?

Beatie Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. For illustration, the company has provided the following data for product K56L: What is the profitability index for product K56L?

How many units of product E01W should be produced each month?

How many units of product I90J should be produced each month?

Up to how much should the company be willing to pay to obtain enough of the constrained resource to satisfy demand for the two existing products?

Managerial Accounting and Cost Concepts

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Activity-Based-Costing: a Tool to Aid Decision Making

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Capital Budgeting Decisions

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based-Costing: a Tool to Aid Decision Making

A Capital Budgeting Decisions

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Performance Measurement in Decentralized Organizations

Pricing Products and Services

Filters

Exam 21: Profitability Analysis

What is the maximum contribution margin the company can earn per month?

How many units of product H98V should be produced each month?

The opportunity cost of using one unit of the constrained resource in a volume trade-off decision is equal to:

How many units of product K36L should be produced each month?

How many units of product L33Y should be produced each month?

What is the maximum contribution margin the company can earn per month?

Heiskell Corporation has provided the following data concerning its two products: The profitability index for product F78P is closest to:

Lachapelle Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. The company has provided the following data for product A97B: What is the profitability index for product A97B?

Beatie Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. For illustration, the company has provided the following data for product K56L: What is the profitability index for product K56L?

How many units of product E01W should be produced each month?

How many units of product I90J should be produced each month?

Up to how much should the company be willing to pay to obtain enough of the constrained resource to satisfy demand for the two existing products?

Managerial Accounting and Cost Concepts

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Activity-Based-Costing: a Tool to Aid Decision Making

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Capital Budgeting Decisions

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Managerial Accounting and Cost Concepts

Job-Order Costing

Activity-Based-Costing: a Tool to Aid Decision Making

A Capital Budgeting Decisions

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Performance Measurement in Decentralized Organizations

Pricing Products and Services

Filters