3.NoreasterCompanyproducesaproductthathasaregularsellingpriceof$360perunit.Atatypicalmonthly productionvolumeof2,000units,theproduct'saverageunitcostofgoodssoldamountsto$270.Includedinthis averageis$120,000offixedmanufacturingcosts.Allsellingandadministrativecostsarefixedandamountto $30,000permonth. NoreasterCompanyhasjustreceivedaspecialorderfor1,000unitsat$240perunit.Thebuyerwillpay transportation,andtheregularsellingpricewillnotbeaffectedifNoreasteracceptstheorder.

AssumingNoreasterCompanyisoperatingatcapacityandacceptingtheorderwouldrequireanoffsetting reductioninregularsales,theeffectonprofitsofacceptingtheorderwouldbea

a.$240,000decrease.

b.$120,000decrease.

c.$150,000decrease.

d.$30,000increase.

BiscuitCompanysellsitsproductfor$50.Inaddition,ithasavariablecostratioof45percentandtotalfixed costsof$6,875.Whatisthebreak-evenpointinunitsforBiscuitCompany?

a.250units

b.3,600units

c.375units

d.2,400units

NonesuchCompanysellsonlyoneproductataregularpriceof$7.50perunit.Variableexpensesare60percent ofsalesandfixedexpensesare$30,000.Managementhasdecidedtodecreasethesellingpriceto$6.00inhopes ofincreasingitsvolumeofsales. Whatsalesdollarlevelisneededtoobtainabefore-taxprofitof$60,000whenthesellingpriceis$6.00perunit?

a.$90,000

b.$120,000

c.$72,000

d.$360,000

11.TaylorCompany'sbudgetedsaleswere10,000unitsat$200perunit.Actualsaleswere9,200unitsat$210per unit. Taylor'stotalsalesvarianceis a.$100,000(U).

b.$68,000(U).

c.$4,000(U).

d.$92,000(U).

13.TheU.S.governmenthassetupforeigntradezones(FTZ)that a.arelocatedonU.S.soilbutareconsideredtobeoutsideofU.S.commercefortariffpurposes. b.arelocatedinforeigncountriesanddesignedtoexporttotheUnitedStates. c.arelocatedinforeigncountriesandaredesignedtoimportfromtheUnitedStates. d.arelocatedintheUnitedStatesandareconsideredpartoftheUnitedStatesfortariffpurposes.

14.Thestepsinthetacticaldecisionmakingprocessare:

I. Comparingrelevantcostsandrelatingtostrategicgoals

II. Identifyingfeasiblealternatives

III. Identifyingcostsandbenefitsandeliminatingirrelevantcosts

IV. Selectingbestalternative

V. Definingtheproblem

Whatisthepropersequenceofsteps? a.I,II,V,III,IV

b.II,I,V,III,IV

c.V,II,III,I,IV

d.V,III,II,IV,I

16.WhichofthefollowingisNOTawaythatcompaniesmightreducetariffs?

a.Altermaterialstoincreasethedomesticcontent.

b.Restricttheamountofimportedmaterials.

c.Increasetheamountofimportedmaterials.

d.Utilizeforeigntradezones.

18.BiscuitCompanysellsitsproductfor$50.Inaddition,ithasavariablecostratioof55percentandtotalfixed costsof$6,875.Howmanyunitsmustbesoldinordertoobtainabefore-taxprofitof$12,000?

a.480units

b.240units

c.600units

d.839units

19.Whichofthefollowingcostsisrelevanttoamake-or-buydecision?

a.originalcostoftheproductionequipment

b.annualdepreciationoftheequipment

c.theamountthatwouldbereceivediftheproductionequipmentweresold d.thecostofdirectmaterialspurchasedlastmonthandusedtomanufacturethecomponent

20.Theprocessingdepartmentcanproduceoneunitevery5minutesandisthelastdepartmentbeforethefinishing department.Undertraditionalmanufacturingwhereabatchequals10units,howlongwillitbebeforethefirst unitinthebatchcanmovefromtheprocessingdepartmenttothefinishingdepartment?

a.5minutes

b.50minutes

c.10minutes

d.notenoughinformationisgiven

23.WhichofthefollowingstatementsisTRUEwhenmakingadecisionbetweentwoalternatives? a.Variablecostsmaynotberelevantwhenthedecisionalternativeshavethesameactivitylevels. b.Variablecostsarenotrelevantwhenthedecisionalternativeshavedifferentactivitylevels.

c.Sunkcostsarealwaysrelevant.

d.Fixedcostsareneverrelevant.

25.In2018,Samantha'sBathandBodyShophadvariablecostsof$27,000,fixedcostsof$18,000,andanetlossof $4,500.

Samantha's2018break-evensalesvolumewas

a.$36,000.

b.$54,000.

c.$49,500.

d.$37,500

26.Whichofthefollowingstatementsistrueoftacticaldecisions?

a.Tacticaldecisionsareoftenlarge-scaleactionsthatserveasmallerpurpose.

b.Tacticaldecisionsdonothaveanimmediateorlimitedendinview.

c.Tacticaldecisionsshouldsupportalternativesthatresultinlong-termcompetitiveadvantage. d.Tacticaldecisionsarelongruninnatureandwillhaveshort-runconsequences.

28.Whichofthefollowingitemswouldbeclassifiedascommittedresources(long-term)?

a.salariedemployees

b.depreciationonbuilding

c.leaseonmachinery

d.bothbandc

29.WhichitemisNOTanexampleofasunkcost?

a.materialsneededforproduction

b.purchasecostofmachinery

c.depreciation

d.allaresunkcosts

30.Adecisionthatfocusesonwhetheraspeciallypricedordershouldbeacceptedorrejectedisa

a.special-orderdecision.

b.keep-or-dropaproduct-linedecision.

c.make-or-buydecision.

d.bothaandc.