Answered step by step
Verified Expert Solution
Question
1 Approved Answer
29. Corn Crunchers has three product lines. Its only unprofitable line is Corn Nuts, the results of which appear below for 2011:Sales $1,050,000 Variable expenses
29. Corn Crunchers has three product lines. Its only unprofitable line is Corn Nuts, the results of which appear below for 2011:Sales $1,050,000 Variable expenses 690,000 Fixed expenses 450,000 Net loss $ (90,000) If this product line is eliminated, 30% of the fixed expenses can be eliminated. How much are the relevant costs in the decision to eliminate this product line? A) $135,000 B) $1,140,000 C) $1,005,000 D) $825,000 30. North Division has the following information:Sales $900,000 Variable expenses 480,000 Fixed expenses 465,000 If this division is eliminated, the fixed expenses will be allocated to the company's other divisions. What is the incremental effect on net income if the division is dropped? A) $45,000 increase B) $465,000 decrease C) $420,000 decrease D) $435,000 increase 31. The overall objective in the determination of a transfer price is to A) maximize the return of the selling division. B) minimize the cost to the purchasing division. C) minimize the return of the selling division. D) maximize the return to the whole company. 32. The markup percentage in the absorption-cost approach is computed by dividing the sum of the desired ROI per unit and A) fixed costs per unit by manufacturing cost per unit. B) fixed costs per unit by variable costs per unit. C) selling and administrative expenses per unit by manufacturing cost per unit. D) selling and administrative expenses per unit by variable costs per unit. 33. The general formula for the minimum transfer price is: minimum transfer price equals A) fixed cost + opportunity cost. B) external purchase price. C) total cost + opportunity cost. D) variable cost + opportunity cost
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started