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Managerial Accounting, 6e, Ch.8




Question;Multiple Choice Question 39Wasson Widget Company is contemplating the production and sale of a new widget. Projected sales are $300,000 (or 75,000 units) and desired profit is $36,000. What is the target cost per unit?A$4.00B$3.52C$4.48D$4.80Multiple Choice Question 46Custom Shoes Co. has gathered the following information concerning one model of shoe:Variable manufacturing costs$40,000Variable selling and administrative costs$20,000Fixed manufacturing costs$160,000Fixed selling and administrative costs$120,000Investment$1,700,000ROI30%Planned production and sales5,000 pairsWhat is the target selling price per pair of shoes?A$158B$142C$114D$170Multiple Choice Question 49Lock Inc. has collected the following data concerning one of its products:Unit sales price$145Total sales15,000 unitsUnit cost$115Total investment$1,800,000The markup percentage isA20.69%B22.59%C26.09%D25%Multiple Choice Question 72The following data is available for Wheels ?N Spokes Repair Shop for 2013:Repair technicians? wages$360,000Fringe benefits80,000Overhead60,000Total$500,000The desired profit margin is $40 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5,000 labor hours will be worked in 2013.In March 2013, Wheels ?N Spokes repairs a bicycle that takes two hours to repair and uses parts of $240. The bill for this repair would beA$520.B$616.C$560.D$592.Multiple Choice Question 80Dudly Drafting Services uses a 45% material loading charge and a labor rate of $20 per hour. How much will be charged on a job that requires 3.5 hours of work and $40 of materials?A$128B$133C$110D$88Multiple Choice Question 85Jaycee Auto Repair has the following budgeted costs for the next year:Time ChargesMaterial ChargesShop employees? wages and benefits$120,000 $ -Parts manager?s salary and benefits -45,000Office employee?s salary and benefits30,00015,000Other overhead15,00040,000Invoice cost of parts and materials -400,000 Total budgeted costs$165,000$500,000The material loading charge to be used next year assuming a 40% markup on material cost isA80%.B65%.C40%.D20%.Multiple Choice Question 97When a sale occurs between divisions of the same company, which transfer pricing approach may lead to the buying division overpricing its product?ACost-plus transfer pricingBCost based transfer pricingCNegotiated transfer pricingDMarket-based transfer pricingMultiple Choice Question 102Tuttle Motorcycles Inc. manufactures and sells high-priced motorcycles. The Engine Division produces and sells engines to other motorcycle companies and internally to the Production Division. It has been decided that the Engine Division will sell 20,000 units to the Production Division at $1,050 a unit. The Engine Division, currently operating at capacity, has a unit sales price of $2,550 and unit variable costs and fixed costs of $1,050 and $750, respectively. The Production Division is currently paying $2,400 per unit to an outside supplier. $90 per unit can be saved on internal sales from reduced selling expenses. What is the increase/decrease in overall company profits if this transfer takes place?AIncrease $2,520,000BIncrease $27,000,000CDecrease $3,000,000DDecrease $1,200,000Multiple Choice Question 104The Can Division of Fruit Products Inc. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.08, respectively. The Packaging Division wants to purchase 50,000 cans at $0.32 a can. Selling internally will save $0.02 a can. Assuming the Can Division is already operating at full capacity, what is the minimum transfer price it should accept?A$0.28B$0.34C$0.58D$0.66Multiple Choice Question 112Variable costs of units sold internally will always beAthe same as the variable costs of units sold externally.BEither higher or lower than for units sold externally.Clower than the variable costs of units sold externally.Dhigher than the variable costs of units sold externally.


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