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96) A company produces 300 microwave ovens per month, each of which includes one electrical circuit. The company currently manufactures the circuit in-house but is considering outsourcing the circuits at a contract price of $48 each. Currently, the cost of producing circuits in-house includes variable costs of $26 per circuit.
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61) A small business produces a single product and reports the following data:   Price $10.59 per unit Variable cost $5 per unit Fixed cost $24,000 per month Volume 13,000 per month   If the company reduces its price to $7.75, it believes that the volume will go up to 15,000 units. How would this change affect operating profit? A) It will go up by $48,670. B) It.
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56) A company has two different products that are sold in different markets. Financial data are as follows:     Product A Product B Total Revenue $18,000 $9500 $27,500 Variable cost (9000) (9700) (18,700) Fixed cost (allocated) ($2000) ($2000) (4000) Operating profit $7000 ($2200) $4800   Assume that fixed costs are all unavoidable and that dropping one product would not impact sales of the other. If Product B is dropped, what would be.
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76) Allston Products sells a special kind of effects pedal for musical performers. Each unit sells for $20.00. Additional data for the month of April 2016, are as follows:   Direct materials $4 per unit Direct labour $8 per unit Variable manufacturing overhead $23,000 per month Fixed manufacturing overhead $15,000 per month Operating expenses $21,000 per month       Beginning inventory 0 units Units produced 10,000 units Units sold 8500 units Ending inventory 700 units   Using absorption costing, how much is.
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36) In a manufacturing operation, property rates and insurance for the plant should be debited to Manufacturing overhead. 37) When manufacturing overhead is allocated, the amount is recorded as a debit to Work in process and a credit to Manufacturing overhead. 38) When manufacturing overhead costs are incurred, the amounts are recorded.
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81) In making product mix decisions under constraining factors, a company should maximise sales of the product with the highest contribution margin per unit. 82) Sand Company manufactures two styles of lamps: a Bedford Lamp and a Lowell Lamp. The following per unit data are available:     Bedford Lamp Lowell Lamp Sale price $30 $50 Variable costs $20 $25 Machine hours.
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61) Macaulay Company has three product lines—D, E, and F. The following information is available:     D E F Sales $90,000 $50,000 $30,000 Variable costs (40,000) (10,000) (10,000) Contribution margin $50,000 $40,000 20,000 Fixed expenses (15,000) (10,000) (24,000) Operating profit (loss) $35,000 $30,000 ($4000)   Macaulay Company is thinking of dropping product line F because it is reporting an operating loss. Assuming fixed costs are unavoidable, if Macaulay Company drops product line F and rents the.
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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 21) Which of the following describes the allocation base for allocating manufacturing overhead costs? A) The factor that reflects the relationship between goods produced and the amount of overhead costs incurred B) The estimated base amount of manufacturing.
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46) If a company is a price-taker, it has considerable flexibility in setting its products' prices. 47) Polynesia Company manufactures sonars for fishing boats. Model 70 sells for $300. Polynesia produces and sells 5 600 of them per year. Cost data are as follows:   Variable manufacturing $100 per unit Variable marketing $16 per unit Fixed manufacturing $280 000 per year Fixed.
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21) Rica Company is a price-taker and uses target pricing. Refer to the following information:   Production volume 601,000 units per year Market price $30 per unit Desired operating profit 15% of total assets Total assets $13,800,000   Variable cost per unit $19 per unit Fixed cost per year $5,500,000 per year   With the current cost structure, Rica cannot achieve its profit goals. It will have to reduce either the.
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1) Fixed costs that do NOT differ between two alternatives are: A) considered opportunity costs. B) irrelevant to the decision. C) important only if they represent a material dollar amount. D) relevant to the decision. 2) All of the following are relevant to the decision to replace equipment EXCEPT the: A) original cost of old equipment. B).
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26) When calculating the predetermined manufacturing overhead rate, what is the correct basis of calculation? A) Estimated overhead costs divided by the number of days in a year B) Actual overhead costs of the prior year divided by the actual amount of the cost driver or allocation base C) Estimated amount of the.
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16) Anthony Company's highest point of total cost was $75,000 in June. Their point of lowest cost was $50,000 in December. The company makes a single product. Production volume in June and December were 13,000 and 8000 units, respectively. What is the fixed cost per month? A) $34,375 B) $35,000 C) $10,000 D) $50,000 17).
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11) In job order costing, the journal entry to issue indirect materials to production should include which of the following? A) Credit to Manufacturing overhead B) Credit to Finished goods inventory C) Credit to Work in process inventory D) Credit to Materials inventory 12) Which of the following correctly describes the term conversion costs? A) The.
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31) Iglesias Company completed Job 12 on 30 November. The details of Job 12 are given below:   Direct labour cost $910 Direct materials cost $1140 Machine hours 10 Direct labour hours 29 Predetermined overhead allocation rate $93 per machine hour   What is the total cost of Job 12? A) $2050 B) $2060 C) $2980 D) $4747 32) Hermione Company completed Job GH6 last month. The cost.
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101) Seven Seas Company manufactures 10 luxury yachts per month. Included in each yacht is a compact media center. Seven Seas manufactures media center in-house, but is considering the possibility of outsourcing that function. At present, the variable cost per unit is $275, and the fixed costs are $41,000 per.
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96) Full-product cost includes all manufacturing costs plus selling expenses, but does not include administrative expenses. 97) Business managers can use activity-based costing data to assist them in pricing and product mix decisions and in cost management. 98) Target pricing is based on the cost to produce a product, plus a profit.
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41) Some companies use contribution margin rather than sales revenues as the basis of incentives for motivating sales persons because it will lead them to sell more of the higher margin goods. 42) Breakeven is the point where the sales revenues are exactly equal to the fixed costs. 43) Breakeven is the.
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91) CM Manufacturing has provided the following unit costs pertaining to a component they manufacture and use in the production of one of their main products:   Direct materials $410 Direct labour (variable) 110 Variable manufacturing overhead 80 Fixed manufacturing overhead 30   A supplier has offered to provide the component to CM Manufacturing for $650 per unit. If CM Manufacturing.
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36) Roberts Company has fixed costs of $12,000. Their contribution margin ratio is 50% and ratio of selling expenses to sales is 30%. What is the breakeven point in sales dollars? A) $24,000 B) $3600 C) $2400 D) $40,000 TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 37) Fixed.
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51) Which of the following statements describes a scenario when management should consider dropping a business division? A) The division's avoidable fixed costs are greater than its contribution margin. B) The division's avoidable fixed costs are less than its contribution margin. C) The division has consistently reported an operating loss. D) The division's unavoidable.
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66) Clay Company manufactures two styles of lamps—a Bedford Lamp and a Lowell Lamp. The following per unit data are available:     Bedford Lamp Lowell Lamp Sale price $30 $35 Variable costs $18 $23 Machine hours required for 1 lamp 2 4   Total fixed costs are $40,000. Machine hour capacity is 20,000 hours per year. Assuming that the company can sell as many.
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1) Which of the following is NOT a fixed cost? A) Property rates B) Direct materials cost C) Salary of plant manager D) Straight-line depreciation 2) Which of the following statements is CORRECT with respect to variable cost per unit, within the relevant range? A) It will decrease as production increases. B) It will remain the same.
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76) The Badminton Company has 4000 machine hours available annually to manufacture racquets. The following information is available for the two different racquets produced by Badminton:   Pro   Unit sales price $300 Unit variable costs $150 Annual demand 1800 units Machine time 1.25 hours per unit Mid   Unit sales price $125 Unit variable costs $80 Annual demand 5000 units Machine time 6 hours per unit   How many units of each.
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TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 6) Accounting firms, building contractors and healthcare providers are companies that use job order costing. 7) Process costing is used by companies that produce large numbers of identical units in a continuous fashion. MULTIPLE CHOICE. Choose the one.
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11) When a business is considering whether to replace old equipment with newer equipment, the cost of operating the old equipment—compared to the cost of operating the new equipment—is information relevant to the business decision. 12) A sunk cost is a cost that was previously incurred and is irrelevant to the.
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16) In a special sales order decision, incremental fixed costs which would be incurred because of an additional purchase of equipment would be considered to be: A) irrelevant to the decision. B) opportunity costs. C) sunk costs. D) relevant to the decision. 17) Paragon Products sells a special kind of navigation equipment for $1 200..
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116) Verdant Avionics makes aircraft instrumentation. Their basic navigation radio requires $140 in variable costs and requires $4 000 per month in fixed costs. If they process the radio further to enhance its functionality, it will require an additional $20 per unit of variable costs, and $300 per month in.
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51) Colin was a professional classical guitar player until his motorcycle accident that left him disabled. After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and started a small shop to make and sell Spanish guitars. The guitars sell for $700 and the fixed monthly.
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