1. Carter Company orders 250 units at a time, and places 15 orders per year. Total ordering cost is $1,100 and total carrying cost is $1,100. Which of the following statements is true? None of these. The economic order quantity (EOQ) is less than 250 The economic order quantity (EOQ) is 250. Total inventory-related cost is lower than it would be at the economic order quantity (EOQ). The economic order quantity (EOQ) is more than 250. 2. Crawford Company's standard fixed overhead cost is $6.00 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labor hours per unit. During 2011, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is the activity level on which Crawford based its fixed overhead rate?" (1 Point) 100,000 direct labor hours 110,000 direct labor hours 50,000 direct labor hours 105,000 direct labor hours 3. The following information pertains to Stark Corporation: Beginning inventory 0 units Ending inventory 5,000 units Direct labor per unit $20 Direct materials per unit 16 Variable overhead per unit 4 Fixed overhead per unit 10 Variable selling costs per unit 12 Fixed selling costs per unit 16 What is the value of ending inventory using the absorption costing method? (1 Point) $200,000 $310,000 O $250,000 $390,000 4. The manager of Stock Division projects the following for next year: Sales $185,000 Operating income $60,000 Operating assets $375,000 The manager can invest in an additional project that would require $40,000 investment in additional assets and would generate $6,000 of additional income. The company's minimum rate of return is 14%. What is the residual income for Stock Division with the additional project? * (1 Point) $7,900 $4,200 $25,600 $40,000 $6,000 5. Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct labor hours and an average of 1.5 sheets of aluminum. It normally manufactures 7,500 airplanes. Materials and labor standards for making the airplanes are: Direct Materials (1 sheet of aluminum @ $10.00) $10.00 Direct Materials (other accessories @ $8.75) 8.75 Direct Labor (6 hours @ $7.00) 42.00 Compute the standard hours allowed for a volume of 10,000 airplanes. (1 Point) 70,000 hours O 65,000 hours O 420,000 hours 60,000 hours 6. Aerotoy Company makes toy airplanes. One plane is an excellent replica of a 737; it sells for $5. Vacation Airlines wants to purchase 12,000 planes at $1.75 each to give to children flying unaccompanied. Costs per plane are as follows: Direct materials $1.00 Direct labor 0.50 Variable overhead 0.10 Fixed overhead 0.90 No variable marketing costs would be incurred. The company is operating significantly below the maximum productive capacity. No fixed costs are avoidable. However, Vacation Airlines wants its own logo and colors on the planes. The cost of the decals is $0.01 per plane and a special machine costing $1,500 would be required to affix the decals. After the order is complete, the machine would be scrapped. Should the special order be accepted? (1 Point) It doesn't matter, there will be no change in income Yes, income will increase by $300. O Yes, income will increase by $180. No, income will decrease by $1,500. O No, income will decrease by $180