$1.$ Mount Hood Industries has two divisions, East Coast and West Coast, and managers are paid

bonuses based on the performance of their division exclusively. Both divisions have profits of

$$1,000,000.$ However, the East Coast division$$s sales are exclusively to the West Coast division.

Which of the following best represents the managers$$ opinions on whether to use a transfer pricing

approach or a market value approach for their bonus systems?

A$.$ The East Coast division manager will want a market value approach, while the West Coast

division manager will want a cost approach.

B$.$ The West Coast division manager will want a market value approach, while the East Coast

division manager will want a cost approach.

C$.$ Both the West Coast and East Coast division managers will want a market value approach.

D$.$ Both the West Coast and East Coast division managers will want a cost approach.

E$.$ None of the Above

$2.$ If the sales volume of ABC Organization increased by $10\%$ and traceable fixed costs decreased

by $20\%$ what would be the new contribution margin relative to the old contribution margin?

A$.80\%$

B$.90\%$

C$.110\%$

D$.70\%$

E$.$ None of the Above

$3.$ Which of the following costs is a product cost that is not directly traceable to a manufactured

product of Under Armour?

A$.$ The salary of the factory$$s security guards.

B$.$ The salary of a supervisor supervising the retail store$$s employees.

C$.$ The salary of the marketing department$$s employee.

D$.$ The salary of a supervisor supervising the factory$$s assembly line employees.

$4.$ Chevy just began production of $1,000$ units of their SUVs. Which of the following best

describes the journal entry to account for this?

A$.$ Debit Work in Progress & Credit Finished Goods

B$.$ Debit Work in Progress & Credit Raw Materials

C$.$ Debit Finished Goods & Credit Raw Materials

D$.$ Debit Finished Goods & Credit Work in Progress

E$.$ None of the Above