College Acct 2- Chapter 11

Front

The sunk cost in the situation with the Tolar Corporation's outdated printers is:

Back

$35,000

Front

In a sell or process further decision, consider the following costs:
1. A variable production cost incurred prior to split-off.
2. A variable production cost incurred after split-off.
3. An avoidable fixed production cost incurred after split-off.
Which of the above costs is (are) NOT relevant in a decision regarding whether the product should be processed further?

Back

Only 1

Front

The company has a capacity of 4,000 machine hours, but there is virtually unlimited demand for each product. In order to maximize total contribution margin, how many units of each product should the company produce? Options: 0 units of X, 0 units of Y, and 200 units of Z; 0 units of X, 500 units of Y, and 0 units of Z; 2,000 units of X, 0 units of Y, and 0 units of Z; 2,000 units of X, 500 units of Y, and 200 units of Z

Back

2,000 units of X, 0 units of Y, and 0 units of Z

Front

Are the materials costs and processing costs relevant in the choice between alternatives X and Y?

Back

Only materials costs are relevant

Front

A special order should be accepted if the revenue from the special order exceeds:

Back

the incremental (extra or "new") costs associated with the order.

Front

What would be the financial advantage (disadvantage) of reworking and selling the material rather than selling it as is as scrap?

Back

($6,000)

Front

The Wyeth Corporation produces three products, A, B, and C, from a single raw material input. Product A can be sold at the splitoff point for $30,000, or it can be processed further at a total cost of $15,000 and then sold for $49,000. Joint costs total $50,000 annually. What should Product A be?

Back

processed further and then sold.

Front

Costs that are directly attributable to a specific activity or decision and can be avoided (either in part or in whole) if the activity is not performed are called:

Back

avoidable costs.

Front

Which of the following would be relevant in the decision to sell or throw out obsolete inventory?

Back

Choice D

Front

Rank the products from the most profitable to the least profitable use of the constrained resource: Bread Baskets, Rag Dolls, Finger Puppets, Pot Holders

Back

Rag Dolls, Pot Holders, Bread Baskets, Finger Puppets