4 easy managerial accounting questions

Avoidable costs can be defined as: Those costs that remain no matter which decision is chosen O Those costs that will be reallocated depending on the decision made. Those costs that will go away if one decision is chosen over another XYZ Company is considering buying the main component of their widget rather than continuing to make them in house. This change would create idle space in the production facility. What might XYZ do? Leave the space empty. o Immediately add a new product line since they have space. This is an opportunity cost to XYZ. If they start to buy then could use this space to start a new line that may be more profitable for them. They may also choose to let it sit idle it from a cost perspective that makes financial sense. You have received the following special order request: 10,000 widgets at $4 each (regular price is $5 each), requiring a $5,000, one time use machine. You will show a net profit of $10,000 on the order after all expenses. You currently have space and time in your production schedule, due to a slump in sales. Do you take the special order? O Since we have to purchase a one-time use machine that will be a sunk cost, no, we will not take the order. O Since they are asking for a discounted price and we can charge more to other customers, no, we will not take the order. We will use the free time to stock our product we could sell at regular price. O Since we have time in our schedule, and it will show a net profit, yes, we will take the order You opened an amazing little bakery and now have more demand for your product that you can produce! It is just you, and you would like to work 10 hours a day, 5 days per week producing your products. If wedding cakes contribute $15/hour and you charge $500 each, birthday cakes, $147 hour and you charge $65 each and cupcakes $16.50/hour and you charge $2 each, which product do you produce first if you cannot fulfill the total demand? O Cupcakes o Wedding cakes O Birthday cakes