Ch 13 MA night

Cost that can not be recovered, remain the same regardless the future decision is called​ (a)  

• sunk cost
• opportunity cost

Organize these options into the right categories

Groups:

(a) Sunk cost

,

(b) Relevant cost

• Cost of R&D failure

• depreciation

• successful R&D cost

• Cost of Unsuccessful recruitment

• variable cost of each options

• cost of human labor based on each options

You have a garment business. Your company plan to outsource the cutting process to other companies. The cost to produce 1 cloth is $1.5 raw material, $3 direct labor, $1.5 fixed overhead. Outsourcing the cutting process will decrease the direct labor by 50%, but the fixed overhead remain the same. The cost of outsourcing per 1 pcs of cloth is $2. Do you suggest the company to outsource? or not?

• Go outsource!

• No.

If the cost to produce 1 watch is Rp. 600.000 and the company plan to target an gross profit ratio of 30%. How much the targeted selling price?

• 780.000

• 857.142

when the company sell the coffee without processed further to be a decaf coffee. The company can sell the NOT decaf coffee for Rp.100.000,- per 250gram. The company can process it to decaff coffee with additional cost of Rp.30.000,- per kg. The selling price of decaff coffee is Rp.110.000 per 250gram. Which option is more profitable, sell at decaff? or not?

• Decaff

• No decaff

You company has an old machinery. The machine is still useable for the 2 year, book value of Rp.10.000.000,-, saleable at Rp.12.000.000,-. You consider to change it by the new machine that can give you Rp.500.000,- production cost reduction than if using old machine. The new machine price is Rp. 36,000,000 with usage period of 3 years. The cost to produce with old machine is Rp.1.000.000 per month,-, with old machine is Rp.500.000 per month. do you suggest to change the machine now? or wait until 2 years later?

• Change now

• Wait until 2 years later