Question 1

Before deciding to accept a special order,the company should evaluate if it has adequate manufacturing ____________.

Accepted Answer

The answer of Before deciding to accept a special order,the...

Question 2

Bianca Jewel Box Manufacturing received an offer from a nonprofit organization for a one-time purchase of 2,000 of its Model RYA18261 at $20 each for distribution to flood victims in the South.Full capacity at Bianca is 25,000 units.Bianca currently expects to make 20,000 units in the current year and based all estimates on that expectation.There will be no delivery costs for this special order.The average costs to Bianca to produce one Model RYA18261 are $27 each as shown.   Should Bianca accept this special offer? Explain your decision.

Accepted Answer

Total variable costs are $17.Therefore,i

Question 3

Which of the following represents a valid reason for rejecting a special order?

Accepted Answer

A)  shipment is expected to go overseas. 
B)  profits will exceed that of current customer orders. 
C)  jeopardizes delivery of a loyal customer's order. 
D)  special tooling is required. 
A)  shipment is expected to go overseas. 
B)  profits will exceed that of current customer orders. 
C)  jeopardizes delivery of a loyal customer's order. 
D)  special tooling is required.

Question 4

Which of the following is NOT relevant in evaluating whether to accept or reject a special order?

Accepted Answer

A)  variable manufacturing costs 
B)  variable selling costs 
C)  incremental fixed costs unique to the order 
D)  fixed manufacturing costs 
A)  variable manufacturing costs 
B)  variable selling costs 
C)  incremental fixed costs unique to the order 
D)  fixed manufacturing costs

Question 5

Which of the following should NOT be a consideration when deciding whether to make or buy a part?

Accepted Answer

A)  impact on quality of the part under each set of circumstances 
B)  impact on factory employee morale 
C)  impact on continued supply of the part 
D)  impact on sales to existing customers 
A)  impact on quality of the part under each set of circumstances 
B)  impact on factory employee morale 
C)  impact on continued supply of the part 
D)  impact on sales to existing customers

Question 6

Common costs are allocated to each segment of a business to determine the segment's contribution margin.

Accepted Answer

A) True 
 B)False

Question 7

The data given below pertains to the operations of the Newton Products Corporation for the year ended December 31,2016.   Based on the information given prepare an income statement for the year using the direct costing approach.Assume that the beginning finished goods inventory had a cost of $25 per unit.

Accepted Answer

The answer of The data given below pertains to the...

Question 8

The Lourdes Corporation manufactures fans.A newly-formed construction company in the area desires to buy up to 300 of their Model CSB3192 this year.Lourdes quoted them a price of $67 which covers all costs plus markon.The construction company has indicated that they will buy all the fans they need in the future from Lourdes Corporation if Lourdes will sell the fans for $60 each.Lourdes Corporation has the capacity to make the 300 fans above their usual production needs.Currently,Lourdes ships all of their production to companies in other parts of the country,but do not usually sell any locally.If the $60 offer covers all costs and allows a small markon,what other things should Lourdes consider before coming to a final decision?

Accepted Answer

Lourdes should consider the possibility

Question 9

The direct costing procedure is sometimes referred to as variable costing.

Accepted Answer

A) True 
 B)False

Question 10

Fixed costs are associated with the capacity to produce goods,not to the actual goods produced.

Accepted Answer

A) True 
 B)False

Question 11

The increase in a cost from one alternative to another is called a(n)____________________ cost.

Accepted Answer

The answer of The increase in a cost from one...

Question 12

Timkon Manufacturing has provided the following operating results for its recent operations:   Using the absorption method,cost of goods manufactured for the year is:

Accepted Answer

A)  $200,000 
B)  $230,000 
C)  $300,000 
D)  $330,000 
A)  $200,000 
B)  $230,000 
C)  $300,000 
D)  $330,000

Question 13

Fixed costs often are not relevant in the decision-making process as costs do not vary in total within a relevant range of activity.

Accepted Answer

A) True 
 B)False

Question 14

When direct costing is used,cost of goods sold reflects

Accepted Answer

A)  both variable and fixed manufacturing costs. 
B)  variable manufacturing costs and variable selling and administrative expenses. 
C)  variable manufacturing costs only. 
D)  fixed manufacturing costs only. 
A)  both variable and fixed manufacturing costs. 
B)  variable manufacturing costs and variable selling and administrative expenses. 
C)  variable manufacturing costs only. 
D)  fixed manufacturing costs only.

Question 15

Using the absorption method,the cost of goods sold is:

Accepted Answer

A)  $550,000 
B)  $540,000 
C)  $480,000 
D)  $450,000 
A)  $550,000 
B)  $540,000 
C)  $480,000 
D)  $450,000

Question 16

The data given below pertains to the operations of the Newton Products Corporation for the year ended December 31,2016.   Based on the information given prepare an income statement for the year using the absorption costing approach.Assume that the beginning finished goods inventory had a cost of $32.50 per unit.

Accepted Answer

The answer of The data given below pertains to the...

Question 17

In managerial decisions,nonmanufacturing costs can be ignored.

Accepted Answer

A) True 
 B)False

Question 18

The variable operating expenses are deducted from the manufacturing margin to arrive at the ____________________ on sales.

Accepted Answer

The answer of The variable operating expenses are deducted from...

Question 19

Nabob Corporation is considering expanding into the Midwest.It is estimated that this new division would generate an average of $378,000 in sales per year.The variable manufacturing costs would be $187,000,variable selling costs would be $72,000,and controllable fixed costs would be $90,000.In addition,the company planned to allocate $85,000 of company common fixed costs to the new division.Is this a wise decision for Nabob Corporation? Why?

Accepted Answer

Yes,the company should open this divisio

Question 20

Manufacturing margin less variable selling and administrative expenses equal marginal income.

Accepted Answer

A) True 
 B)False

Exam 30: Cost-Revenue Analysis for Decision Making

Before deciding to accept a special order,the company should evaluate if it has adequate manufacturing ____________.

Which of the following represents a valid reason for rejecting a special order?

Which of the following is NOT relevant in evaluating whether to accept or reject a special order?

Which of the following should NOT be a consideration when deciding whether to make or buy a part?

Common costs are allocated to each segment of a business to determine the segment's contribution margin.

The direct costing procedure is sometimes referred to as variable costing.

Fixed costs are associated with the capacity to produce goods,not to the actual goods produced.

The increase in a cost from one alternative to another is called a(n)____________________ cost.

Timkon Manufacturing has provided the following operating results for its recent operations: Using the absorption method,cost of goods manufactured for the year is:

Fixed costs often are not relevant in the decision-making process as costs do not vary in total within a relevant range of activity.

When direct costing is used,cost of goods sold reflects

Using the absorption method,the cost of goods sold is:

In managerial decisions,nonmanufacturing costs can be ignored.

The variable operating expenses are deducted from the manufacturing margin to arrive at the ____________________ on sales.

Manufacturing margin less variable selling and administrative expenses equal marginal income.

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analyses

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

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