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Question
Based on the preceding data, determine the administrative cost allocated to each operating department of Bridgestreet, Inc.
| A. | Cutting: $ 56,666 | Assembling: $ 56,666 | Finishing: $ 56,666 |
| B. | Cutting: $ 5,000 | Assembling: $ 4,000 | Finishing: $ 1,000 |
| C. | Cutting: $127,333 | Assembling: $127,333 | Finishing: $127,333 |
| D. | Cutting: $ 85,000 | Assembling: $ 68,000 | Finishing: $ 17,000 |
| E. | Cutting: $191,000 | Assembling: $152,800 | Finishing: $ 38,200 |
Answer
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Related questions
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The _______________________________ is computed by discounting the future net cash flows from the investment at the project's required rate of return and then subtracting the initial amount invested.
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B. Rebuild the units.
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D. Neither sell nor rebuild because both alternatives produce a loss. Instead, the company should store the units permanently.
E. Throw the units away.
Q:
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A. Sell the units as scrap.
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Q:
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Q:
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Q:
Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
3.0373 Assuming all revenue is to be received at the end of each year, what are the net cash flows for this investment if net present value equals ($11,790)?
A. $78,210
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D. $237,547
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Q:
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B. $(251.52) and Scott would be willing to pay $29,748.48 for the machine.
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Q:
A disadvantage of using the payback period to compare investment alternatives is that:
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B. It includes the time value of money.
C. It cannot be used when cash flows are not uniform.
D. It cannot be used if a company records depreciation.
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Q:
A given project requires a $25,000 investment and is expected to generate end-of-period annual cash inflows as follows: Year 1
Year 2
Year 3
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$15,000
$6,000
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i = 10% n = 2
i = 10% n = 3 .9091
.8264
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D. $8,275.00
E. $0.00
Q:
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E. Net present value, payback period, accounting rate of return, and internal rate of return.
Q:
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A. To eliminate all risk.
B. To discount all future and past cash flows.
C. To earn a satisfactory return on investment.
D. To reverse past decisions.
E. To reduce the number of investment activities.
Q:
Are relevant costs useful to management in determining long-run pricing decisions?
Q:
What is the difference between an opportunity cost and a sunk cost?
Q:
Rocko Inc. has a machine with a book value of $50,000 and a five-year remaining life. A new machine is available at a cost of $85,000 and Rocko can also receive $38,000 for trading in the old machine. The new machine will reduce variable manufacturing costs by $14,000 per year over its five-year life. Should the machine be replaced?
A. Yes, because income will increase by $14,000 per year.
B. Yes, because income will increase by $23,000 in total.
C. No, because the company will be $23,000 worse off in total.
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Q:
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Dept. R
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$7,000
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2,000
3,000
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5,500
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B. $500 decrease
C. $4,000 increase
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E. $3,500 decrease
Q:
Bandy Corporation owns a machine that manufactures lawn games. Production time for the croquet set is 10 units per hour and for the volley ball game is 8 units per hour. The machines capacity is 1,500 hours per year. Both products are sold to a single customer who has agreed to buy all of the companys output up to a maximum of 4,000 croquet sets and 10,000 volleyball games. Selling prices and variable costs per unit are shown below. Based on this information, what is Bandy Corporations most profitable sales mix? Croquet Set
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$62 Variable costs per unit
42
25 A. 15,000 croquet sets.
B. 12,000 volleyball games.
C. 4,000 croquet sets and 10,000 volleyball games.
D. 4,000 croquet sets and 8,800 volleyball games.
E. 2,500 croquet sets and 10,000 volleyball games.
Q:
A company has already incurred a $24,000 cost in partially producing its two products. Their selling prices when partially and fully processed are shown in the following table with the additional costs necessary to finish their processing. Based on this information, should any products be processed further? Product
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$900
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675
76 A. Both product A and product B should be processed further.
B. Neither product A nor product B should be processed further.
C. Only product B should be processed further.
D. Only product A should be processed further.
E. A processing further decision cannot be made from the available data.
Q:
Altertech Inc. manufactures a product that contains a circuit board. The company has always purchased this circuit board from a supplier for $32 each. Altertech recently upgraded its own manufacturing capabilities and now has enough excess capacity (including trained workers) to begin manufacturing the circuit board instead of buying it. The company prepared the following per unit cost projections of making the circuit board, assuming that overhead is allocated to the part at the normal predetermined overhead rate of 110% of direct labor cost. Direct materials
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22 Total
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A. Income will decrease by $7 per unit.
B. Income will increase by $7 per unit.
C. Income will increase by $12 per unit.
D. Income will decrease by $12 per unit.
E. Income will increase by $10 per unit.
Q:
A company expects to produce and sell 7,000 units of a single product. The following additional company information is available: Variable costs (per unit) Production costs
$20 Nonproduction costs
$3 Fixed costs (in total) Overhead
$175,000 Nonproduction
$14,000 Compute this companys total cost per unit.
A. $23
B. $45
C. $27
D. $50
E. $5
Q:
Assume markup percentage equals desired profit divided by total costs. What is the correct calculation to determine the dollar amount of the markup per unit?
A. Total cost times markup percentage.
B. Total cost per unit times markup percentage per unit.
C. Total cost per unit divided by markup percentage per unit.
D. Markup percentage per unit divided by total cost per unit.
E. Markup percentage divided by total cost.
Q:
Capital budgeting decisions are generally based on:
A. Tentative predictions of future outcomes.
B. Perfect predictions of future outcomes.
C. Results from past outcomes only.
D. Results from current outcomes only.
E. Speculation of interest rates and economic performance only.
Q:
If net present values are used to evaluate two investments that have equal costs and equal total cash flows, the one with more cash flows in the early years has the higher net present value.