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charter oak acc102 week 8 test part 1




Question;?;1. By choosing to go;into business for himself, Joe Green foregoes the possibility of getting a;highly paid job with a large company. This;is called a (n);Answer;?;Question 2;5 out of 5 points;2. Which of the;following types of cost are always relevant to a decision?;Answer;?;Question 3;5 out of 5 points;3. In deciding;whether or not to accept a special order, what is the opportunity cost of;using machinery for which the firm has sufficient excess capacity to accept;the order?;Answer;\;?;Question 4;5 out of 5 points;Use the following to answer questions 4-5;Classic Furniture produced a batch of 2,000;coffee tables at a cost of $325,000. It;is discovered that the entire batch was finished improperly. Classic can sell the tables as;seconds for $275,000 or spend an additional $285,000 to refinish them and;sell them for $575,000.;4. Refer to the;information above. In;deciding whether to rework the tables or sell them as is, management should;Answer;?;Question 5;5 out of 5 points;5. Refer to the;information above. Which;of the following is not relevant to management's decision regarding;refinishing the tables or selling them as is?;Answer;?;Question 6;5 out of 5 points;Use the following to answer questions 6-9;Prestige Industries currently manufactures and;sells 20,000 power saws per month, although it has the capacity to produce;35,000 units per month. At;the 20,000-unit-per-month level of production, the per-unit cost is $45;consisting of $30 in variable costs and $15 in fixed costs. Prestige sells its saws to retail;stores for $75 each. Roy;Distributors has offered to purchase 5,000 saws per month at a reduced price. Prestige can manufacture these;additional units with no change in its present level of fixed manufacturing;costs.;6. Refer to the;information above. Which;of the following is not a relevant factor in Prestige's decision concerning;whether to accept the special order from Roy?;Answer;?;Question 7;5 out of 5 points;7. Refer to the;information above. Assume;that Roy Distributors offers to purchase the additional 5,000 saws at a price;of $37 per unit. If;Prestige accepts this price, Prestige's monthly gross profit on sales of;power saws will;Answer;?;Question 8;5 out of 5 points;8. Refer to the;information above. Using;an incremental analysis approach, Prestige should consider accepting this;special order only if the price per unit offered by Roy is at;least;Answer;?;Question 9;5 out of 5 points;9. Refer to the;information above. Prestige;decides to accept the special order for 5,000 units from Roy at a;unit sales price that will add $100,000 per month to its operating income. The unit price Prestige is;charging Roy is;Answer;?;Question 10;5 out of 5 points;Use the following to answer questions 10-12;John Stag Corporation manufactures and sells;1,000 tractors each month. The;primary component in each tractor is the motor. John Stag has the monthly;capacity to produce 1,300 motors. The;variable costs associated with manufacturing each motor are shown below;Direct;materials....................................................................;$22;Direct;labor..........................................................................;14;Variable;manufacturing overhead..........................................;27;Fixed manufacturing overhead per month (for up to;1,300 units of production) averages $26,000. Mary;Doe, Inc., has offered to purchase 200 motors from John Stag per month to be;used in its own outboard motors.;10. Refer to the;information above. If;Mary Doe's order is rejected, what will be John Stag's average unit cost of;manufacturing each motor?;Answer;?;Question 11;5 out of 5 points;11. Refer to the;information above. What;is the incremental cost of producing each additional motor?;Answer;5 out of 5 points;12. Refer to the;information above. Assuming;John Stag wants to earn a pretax profit of $10,000 on this special order;what price must it charge Mary Doe?;Answer;?;Question 13;5 out of 5 points;13. Sterling;Products, a manufacturer of aircraft landing gear, makes 1,000 units each;year of a special valve used in assembling one of its products.The unit cost of producing this valve;includes variable costs of $70 and fixed costs of $60. The valves could be purchased from an;outside supplier at $77 each. If;the valve were purchased from the outside supplier, 40% of the total fixed;costs incurred in producing this valve could be eliminated.Buying the valves from the outside;supplier instead of making them would cause the company's operating income;to;Answer;?;Question 14;5 out of 5 points;14. Able Company;manufactures and sells 20,000 units of product X per month. Each unit of product X sells for $16;and has a contribution margin of $5.If;product X is discontinued, $66,000 in fixed monthly overhead costs would be;eliminated and there would be no effect on the sales volume of Able Company's;other products. If;product X is discontinued, Able Company's monthly income before taxes should;Answer


Paper#42627 | Written in 18-Jul-2015

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