1. Blueberry is discontinuing its B4 smartphone which has become outdated. It has 70,000 partially complete B4's in work-in-progress on which it has incurred 4.8 million of costs (including 0.8 million of allocated overhead).It could complete these units at a cost of 3.0 million in direct material and labour.The units could then be sold for 7.4 million. Alternatively, it could sell the unfinished units for scrap and realise 4.5 million. Financially, the best course of action is:

A.To pursue neither option as both result in a loss

B.To complete d then sell the units

C.To sell the unfinished units for scrap

D.Not possible to determine without knowing how the overhead has been allocated

1. In general, a balanced scorecard is used to evaluate an organisation's performance using:

A.Flexible budgets and volume analysis.

B.Multiple financial and non-financial metrics.

C.Management accounts and operational reports.

D.The organisation's audit committee reports.

14.Rothar Limited, a company which makes and sells bikes, is planning to launch a new product into a highly competitive segment of the market. After extensive market research and competitor analysis Rothar has established a target selling price of 160. It has estimated that the cost of making the new bike will be 130 (Direct materials of 60; Direct labour 4 hours at 12.50 per hour; Direct overheads of 20). Which of the following is not a viable strategy to satisfy its objective of achieving a gross margin of at least 25%?

A.Increasing the price to 175

B.Outsourcing direct labour to a third party which will charge 10 per hour

C.Renegotiating with its suppliers to obtain a 20% discount on materials

D.Redesigning the production process to reduce the direct labour to 3 hours per bike