ACCT202-Teng In-Class Midterm 1 Name Fall 2017 Date: 1. Canosta, Inc. determined that it must expand its capacity to accept a special order. Which situation is likely? A) Both variable and fixed costs will be relevant. B) Unit variable costs will increase. C) Fixed costs will not be relevant D) The company should accept the order 2. Portman Company's activity for the first three months of 2016 are as follows: January February March 2,100 2,600 2,900 $4,800 $5,800 $6,400 Using the high-low method, how much is the cost per machine hour? A) S1.78 B) S2.26 C) $2.00 D) $3.00 3. In a sales mix situation, at any level of units sold, net income will be higher if A) more higher contribution margin units are sold than lower contribution margin units B) weighted-average unit contribution margin decreases. C) more fixed expenses are incurred. D) more lower contribution margin units are sold than higher contribution margin units. 4. Ruth Company produces 1,000 units of a necessary componeat with the following costs 27,000 16,000 4,000 7,000 Direct Materials Direct Labor Variable Overhead Fixed Overhead None of Ruth Company's fixed overhead costs can be reduced, but another product could be made that would increase profit contribution by $8,000 if the components were acquired extermally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Ruth Company would be willing to accept to acquire the 1,000 units externally? A) $58,000 B) $51,000 C) $55,000 D) $46,000 Page 1 Scrambled version B