1 .Jason is trying to decide which one of two job offers he will accept. Several items are presented below:

Which of the above items would be considered relevant costs?

(1), (3), (5) (2), (4) (5) None of these.

2 . ServicePro provides two kinds of services. During the most recent accounting period, the two service lines produced the following operating results:

If the company stops providing Service 2:

The company's income will decrease by $1,500 per year.

The company's income will increase by $1,500 per year.

The company's income will decrease by $3,500 per year.

The company's income will increase by $3,500 per year.

3. The Mansfield Company manufactures and sells two lines of fishing rods. During the most recent accounting period, the Pro line and the Novice line sold 15,000 and 2,000 units, respectively. The company's most recent financial statements are shown below:

Based on this information, the company should:

Eliminate the Novice line because it is operating at a loss.

Keep the Novice line because it contributes $40,000 to total profitability.

Keep the Novice line because it contributes $55,000 to total profitability.

It is impossible to determine with the given information.

.

4 .Hancock Company manufactures and sells two lines of furniture, case goods and upholstery. During the most recent accounting period, the Case Goods and Upholstery Divisions sold 15,000 and 2,000 units, respectively. The company's most recent financial statements are shown below (Do not round intermediate calculations.):

If unit sales for both divisions increased 10%, the company would report which of the following?

A $52,000 increase in net income for the Upholstery Division

A 10% increase in total net income of the company

A decline in profit for the Upholstery Division

A net income for the Upholstery Division of $9,000

5 . Mountain Gear has been using the same machines to make its name brand clothing for the last five years. A cost efficiency consultant has suggested that production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the company $100,000. The old machines presently have a book value of $60,000 and a market value of $6,000. They are expected to have a five-year remaining life and zero salvage value. The new machines would cost the company $50,000 and have operating expenses of $9,000 a year. The new machines are expected to have a five-year useful life and no salvage value. The operating expenses associated with the old machines are $15,000 a year. The new machines are expected to increase quality, justifying a price increase, and thereby increasing sales revenue by $5,000 a year. Select the true statement.

The company will be $11,000 better off over the 5-year period if it replaces the old equipment.

The company will be $20,000 better off over the 5-year period if it keeps the old equipment.

The company will be $12,000 better off over the 5-year period if it replaces the old equipment.

The company will be $6,000 better off over the 5-year period if it replaces the old equipment.

(1) Base salary (2) Overtime compensation (3) Moving allowance (4) Signing bonus (5) Job search costs Job Offer A $40,000 Comp. time $ 2,000 $ 1,000 $ 500 Job Offer B $40,000 Hourly rate $ 2,000 $ 0 $ 500 Service revenue Unit-level materials Unit-level labor Product-level selling & administrative costs Company wide facility-level costs Net income Service 1 $80,000 ($20,000) ($30,000) ($10,000) ($ 5,000) $15,000 Service 2 $20,000 ($ 2,000) ($14,000) ($ 2,500) ($ 5,000) $ 3.500 Pro Novice $ 900,000 $ 240,000 Sales Less cost of goods sold: Unit-level production cost Depreciation, production equipment Gross margin Less operating expenses: Unit-level selling and admin. Costs Corporate-level facility expenses (fixed) Net income (loss) 600,000 125,000 $ 175,000 $ 135,000 50,000 55,000 40,000 36,000 99,000 $ 65,000 36,000 (46,000) $ Case Goods Upholstery $ 1,600,000 $ 400,000 Sales Less cost of goods sold: Unit-level production cost Depreciation, production equipment Gross margin Less operating expenses: Unit-level selling and admin. Costs Corporate-level facility expenses (fixed) Net income (loss) 1,000,000 240,000 360,000 $ 240,000 60,000 100,000 $ 60,000 52,000 248,000 $ 50,000 52,000 (2,000) $