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41. Chang Industries has excess production capacity and the ability to make/produce a part that is a core component of the finished good. Variable costs
41. Chang Industries has excess production capacity and the ability to make/produce a part that is a core component of the finished good. Variable costs to make the part would be $12 each. Overhead assigned is $6.50 per unit of finished goods inventory. The incremental overhead associated with making the part is $3.15 per part. Chang has a supplier willing to sell the part for $17.50 each. Should Chang make or buy the part and why? A) Buy the part as it is $2.35 per part cheaper than making the part. B) Buy the part as it is $2.35 per part cheaper than making the part. C) Make the part as it is $2.35 per part cheaper than purchasing the part. D) Make the part as it is $4.15 per part cheaper than purchasing the part. 42. Inventory costs are recorded in Work in Process Inventory and transferred to Finished Goods Inventory upon completion. Where do product costs end up once the product is sold? A) Finished Goods Inventory balance on the balance sheet B) Work in Process Inventory balance on the balance sheet C) Selling expenses on the income statement Cost of goods sold on the income statement 43. The return on an investment (ROI), expressed as a percentage, is calculated by: Dividing total sales of an investment center by the average invested assets and the higher the better. B) Dividing total sales of an investment center by the average invested assets and the lower the better. C) Dividing income of an investment center by the average invested assets, an the higher the better. D) Dividing income of an investment center by the average invested assets, an the lower the better. 44. What are conversion costs? A) Direct materials and direct labor costs combined A Direct labor and factory overhead costs combined C) Variable and fixed overhead costs D) Only variable overhead costs
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