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##### finance homework mcq

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Question;Elhard;Company produces a single product. The cost of producing and selling a single;unit of this product at the company's normal activity level of 40,000 units per;month is as follows;The normal selling price;of the product is $51.10 per unit.;An;order has been received from an overseas customer for 2,000 units to be;delivered this month at a special discounted price. This order would have no;effect on the company's normal sales and would not change the total amount of;the company's fixed costs. The variable selling and administrative expense;would be $0.10 less per unit on this order than on normal sales.;Direct;labor is a variable cost in this company.;90. Suppose;there is ample idle capacity to produce the units required by the overseas;customer and the special discounted price on the special order is $41.60 per;unit. By how much would this special order increase (decrease) the company's;net operating income for the month?;A.;$2,000;B.;$25,200;C.;$(8,400);D.;$(18,800);91. Suppose;the company is already operating at capacity when the special order is received;from the overseas customer. What would be the opportunity cost of each unit;delivered to the overseas customer?;A.;$5.40;B.;$5.30;C.;$9.50;D.;$22.00;92. Suppose;there is not enough idle capacity to produce all of the units for the overseas;customer and accepting the special order would require cutting back on;production of 200 units for regular customers. The minimum acceptable price per;unit for the special order is closest to;A.;$38.80;B.;$31.20;C.;$51.10;D.;$45.80;The;Varone Company makes a single product called a Hom. The company has the;capacity to produce 40,000 Homs per year. Per unit costs to produce and sell;one Hom at that activity level are;The;regular selling price for one Hom is $60. A special order has been received at;Varone from the Fairview Company to purchase 8,000 Homs next year at 15% off;the regular selling price. If this special order were accepted, the variable;selling expense would be reduced by 25%. However, Varone would have to purchase;a specialized machine to engrave the Fairview name on each Hom in the special;order. This machine would cost $12,000 and it would have no use after the;special order was filled. The total fixed costs, both manufacturing and;selling, are constant within the relevant range of 30,000 to 40,000 Homs per;year. Assume direct labor is a variable cost.;93. If;Varone can expect to sell 32,000 Homs next year through regular channels and the;special order is accepted at 15% off the regular selling price, the effect on;net operating income next year due to accepting this order would be a;A.;$52,000 increase;B.;$80,000 increase;C.;$24,000 decrease;D.;$68,000 increase;94.;If Varone can expect to sell;32,000 Homs next year through regular channels, at what special order price;from Fairview should Varone be economically indifferent between either;accepting or not accepting this special order?;A.;$51.00;B.;$48.20;C.;$42.50;D.;$39.60;95. If;Varone has an opportunity to sell 37,960 Homs next year through regular;channels and the special order is accepted for 15% off the regular selling;price, the effect on net operating income next year due to accepting this order;would be a;A.;$33,320 decrease;B.;$33,320 increase;C.;$35,480 decrease;D.;$35,480 increase;The;Immanuel Company has just obtained a request for a special order of 6,000 jigs;to be shipped at the end of the month at a selling price of $7 each. The;company has a production capacity of 90,000 jigs per month with total fixed;production costs of $144,000. At present, the company is selling 80,000 jigs;per month through regular channels at a selling price of $11 each. For these;regular sales, the cost for one jig is;If;the special order is accepted, Immanuel will not incur any selling expense;however, it will incur shipping costs of $0.30 per unit. Total fixed production;cost would not be affected by this order.;96.;If Immanuel accepts this special order, the change;in monthly net operating income will be a;A.;$12,600 increase;B.;$14,400 increase;C.;$3,600 increase;D.;$1,800 increase;97.;At what selling price per unit;should Immanuel be indifferent between accepting or rejecting the special;offer?;A.;$7.40;B.;$7.70;C.;$6.40;D.;$4.90;98. Suppose;that regular sales of jigs total 85,000 units per month. All other conditions;remain the same. If Immanuel accepts the special order, the change in monthly;net operating income will be;A.;$14,400 increase;B.;$7,200 increase;C.;$3,600 decrease;D.;$5,400 decrease;Mckerchie Inc. manufactures industrial components.;One of its products, which is used in the construction of industrial air;conditioners, is known as G62. Data concerning this product are given below;The;above per unit data are based on annual production of 9,000 units of the;component. Direct labor can be considered to be a variable cost.;99. The;company has received a special, one-time-only order for 300 units of component;G62. There would be no variable selling expense on this special order and the;total fixed manufacturing overhead and fixed selling and administrative;expenses of the company would not be affected by the order. Assuming that;Mckerchie has excess capacity and can fill the order without cutting back on;the production of any product, what is the minimum price per unit on the;special order below which the company should not go?;A.;$26;B.;$67;C.;$55;D.;$160;100.The company has received a special;one-time-only order for 300 units of component G62. There would be no variable;selling expense on this special order and the total fixed manufacturing;overhead and fixed selling and administrative expenses of the company would not;be affected by the order. However, assume that Mckerchie has no excess capacity;and this special order would require 50 minutes of the constraining resource;which could be used instead to produce products with a total contribution;margin of $6,900. What is the minimum price per unit on the special order below;which the company should not go?;A.;$90;B.;$23;C.;$49;D.;$78;101.Refer to the original data in the problem.;What is the current contribution margin per unit for component G62 based on its;selling price of $160 and its annual production of 9,000 units?;A.;$28;B.;$134;C.;$93;D.;$132;The;constraint at Dalbey Corporation is time on a particular machine. The company;makes three products that use this machine. Data concerning those products;appear below;102.Rank the products in order of their current;profitability from most profitable to least profitable. In other words, rank;the products in the order in which they should be emphasized.;A.;WP, FE, MB;B.;FE, WP, MB;C.;FE, MB, WP;D.;MB, FE, WP;103.Assume that sufficient time is;available on the constrained machine to satisfy demand for all but the least;profitable product. Up to how much should the company be willing to pay to;acquire more of this constrained resource?;A.;$12.50 per minute;B.;$29.96 per unit;C.;$10.70 per minute;D.;$71.92 per unit;Marrin;Corporation makes three products that use the current constraint-a particular;type of machine. Data concerning those products appear below;104.Rank the products in order of their current;profitability from most profitable to least profitable. In other words, rank;the products in the order in which they should be emphasized.;A.;KZ, XB, ZP;B.;ZP, KZ, XB;C.;XB, ZP, KZ;D.;KZ, ZP, XB;105.Assume;that sufficient constraint time is available to satisfy demand for all but the;least profitable product. Up to how much should the company be willing to pay;to acquire more of the constrained resource?;A.;$14.30 per minute;B.;$14.80 per minute;C.;$33.81 per unit;D.;$118.69 per unit;Cress Company makes four;products in a single facility. Data concerning these products appear below;The;milling machines are potentially the constraint in the production facility. A;total of 11,500 minutes are available per month on these machines.;106.How many;minutes of milling machine time would be required to satisfy demand for all;four products?;A.;12,000;B.;10,800;C.;9,000;D.;11,500;107.Which;product makes the LEAST profitable use of the milling machines?;A.;Product A;B.;Product B;C.;Product C;D.;Product D;108.Which;product makes the MOST profitable use of the milling machines?;A.;Product A;B.;Product B;C.;Product C;D.;Product D;109.Up;to how much should the company be willing to pay for one additional minute of;milling machine time if the company has made the best use of the existing;milling machine capacity? (Round off to the nearest whole cent.);A.;$7.46;B.;$15.20;C.;$19.40;D.;$0.00;Broze;Company makes four products in a single facility. These products have the;following unit product costs;Additional data concerning;these products are listed below.;The;grinding machines are potentially the constraint in the production facility. A;total of 53,600 minutes are available per month on these machines.;Direct;labor is a variable cost in this company.;110.How many;minutes of grinding machine time would be required to satisfy demand for all;four products?;A. 56,100;B.;40,900;C.;53,600;D.;13,000;111.Which;product makes the LEAST profitable use of the grinding machines?;A.;Product A;B.;Product B;C.;Product C;D.;Product D;112.Which;product makes the MOST profitable use of the grinding machines?;A.;Product A;B.;Product B;C.;Product C;D.;Product D;113.Up to how much should the company be willing;to pay for one additional minute of grinding machine time if the company has;made the best use of the existing grinding machine capacity? (Round off to the;nearest whole cent.);A.;$35.90;B.;$0.00;C.;$8.58;D.;$11.60;Dunford Company;produces three products with the following costs and selling prices;114.If Dunford has a limit of 20,000 direct labor;hours but no limit on units sold or machine hours, then the ranking of the;products from the most profitable to the least profitable use of the;constrained resource is;A.;X, Y, Z;B.;Y, Z, X;C.;X, Z, Y;D.;Z, Y, X;115.If Dunford has a limit of 30,000 machine hours;but no limit on units sold or direct labor hours, then the ranking of the;products from the most profitable to the least profitable use of the;constrained resource is;A.;Y, Z, X;B.;X, Y, Z;C.;X, Z, Y;D.;Z, X, Y;Sohr;Corporation processes sugar beets that it purchases from farmers. Sugar beets;are processed in batches. A batch of sugar beets costs $50 to buy from farmers;and $15 to crush in the company's plant. Two intermediate products, beet fiber;and beet juice, emerge from the crushing process. The beet fiber can be sold as;is for $20 or processed further for $19 to make the end product industrial;fiber that is sold for $58. The beet juice can be sold as is for $41 or;processed further for $23 to make the end product refined sugar that is sold;for $58.;116.How much profit (loss) does the company make;by processing one batch of sugar beets into the end products industrial fiber;and refined sugar?;A.;$(107);B.;$(4);C.;$9;D.;$13;117.How much profit (loss) does the company make;by processing the intermediate product beet juice into refined sugar rather;than selling it as is?;A.;$(71);B.;$(6);C.;$(39);D.;$(21);118.Which of;the intermediate products should be processed further?;A.;beet fiber should NOT be processed;into industrial fiber, beet juice should be processed into refined sugar;B.beet;fiber should NOT be processed into industrial fiber, beet juice should NOT be;processed into refined sugar;C.;beet fiber should be processed;into industrial fiber, beet juice should be processed into refined sugar;D.;beet fiber should be processed;into industrial fiber, beet juice should NOT be processed into refined sugar;Resendes Refiners, Inc., processes sugar cane that;it purchases from farmers. Sugar cane is processed in batches. A batch of sugar;cane costs $48 to buy from farmers and $16 to crush in the company's plant. Two;intermediate products, cane fiber and cane juice, emerge from the crushing;process. The cane fiber can be sold as is for $24 or processed further for $17;to make the end product industrial fiber that is sold for $38. The cane juice;can be sold as is for $34 or processed further for $23 to make the end product;molasses that is sold for $76.;119.How much profit (loss) does the company make;by processing one batch of sugar cane into the end products industrial fiber;and molasses?;A.;$16;B.;$(104);C.;$(6);D.;$10;120.How much profit (loss) does the company make;by processing the intermediate product cane juice into molasses rather than;selling it as is?;A.;$3;B.;$19;C.;$(45);D.;$(13)

Paper#50046 | Written in 18-Jul-2015

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