1 Cost information for short-run decision making focuses on a. what happened. b. what is happening. c. what will happen. d. why it happened. 0.5 points Question 2 Qualitative factors used by decision makers include all of the following except a. social issues. b. revenue from fees. c. timeliness. d. competition. 0.5 points Question 3 Irrelevant costs are costs that are a. different among alternatives. b. avoidable costs. c. opportunity costs. d. sunk costs. 0.5 points Question 4 Taylor manufactures 12,000 units of a part used in its production to manufacture guitars. The annual production activities related to this part are as follows: Direct materials, $24,000 Direct labor, $60,000 Variable overhead, $54,000 Fixed overhead, $84,000 Best Guitars, Inc., has offered to sell 12,000 units of the same part to Taylor for $22 per unit. If Taylor were to accept the offer, some of the facilities presently used to manufacture the part could be rented to a third party at an annual rental of $18,000. Moreover, $4 per unit of the fixed overhead applied to the part would be totally eliminated. In the decision to make or buy the part, what is the relevant fixed overhead? a. $30,000 b. $54,000 c. $84,000 d. $48,000 0.5 points Question 5 The Norran Company needs 15,000 units of a certain part to use in its production cycle. If Norran buys the part from Waterloo Company instead of making it, Norran could not use the released facilities in another activity; thus, all of the fixed overhead applied will continue regardless of what decision is made. Accounting records provide the following data: Cost to Norran to make the part: Direct materials, $3 Direct labor, $12 Variable overhead, $13 Fixed overhead applied, $8 Cost to buy the part from the Waterloo Company, $27 What should Norran's decision be, and what is the total cost savings that would result? a. Buy, $90,000 b. Buy, $15,000 c. Make, $90,000 d. Make, $15,000 0.5 points Question 6 Which of the following techniques is most useful for a special order decision? a. Payback method b. Present value method c. Accounting rate-of-return method d. Incremental analysis 0.5 points Question 7 Candidates for outsourcing would include a. custodial services. b. payroll processing. c. information management. d. all of these. 0.5 points Question 8 The normal selling price of our product is $42 per unit. The costs of production are direct materials, $8; direct labor, $6; variable overhead, $7; and fixed overhead, $4 (based on normal capacity). The company has received a special order for 11,900 units at a unit sales price of $23. There is ample unused capacity to fill the order and $1 per unit will be incurred for additional freight costs. If the order is accepted, operating income will a. increase by $11,900. b. decrease by $35,700. c. increase by $23,800. d. decrease by $23,800. 0.5 points Question 9 Relevant costs in a sell or process-further decision include a. costs of additional processing. b. both additional revenues and additional costs. c. revenues after additional processing. d. joint product costs. 0.5 points Question 10 Products Uno, Dos, Tres, and Quatro have contribution margins of $2, $3, $4, and $5, respectively, and require 1.5, 2, 2.5, and 3 machine hours per unit, respectively. Assuming that all units produced could be sold and that total machine hours per month are limited, on which product should the company concentrate its efforts? a. Dos b. Quatro c. Uno d. Tres