Layout References Mailings Review View Help INSTRUCTIONS: Indicate if each question is True or False Question 1-6 are worth 2 points a piece and 7 is worth 8 points 1. When measuring the direct material price variance, the actual quantity should be the quantity purchased? 2. When measuring the direct material quantity variance, the actual quantity should be the quantity used? 3. Avoidable costs are relevant when deciding it to make or buy a product? 4. Opportunity costs are not relevant to decision making? 5. An opportunity cost is a benefit that a foregone when one alternative is selected over another? 6. Depreciation on equipment used in making a product is not a relevant cost if it is unavoidable? 7. See scenario below ( 8 points) Imperial Jewelers is considering a special order for 20 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $189.95 and its unit product cost is $149.00 as shown below Direct materials $ 84.00 Direct labor 45.00 Manufacturing overhead 20.00 Unit product cost $149.00 d bro i do P F FS Prtsen Home F7 End Poup VO & ( 5 6 7 8 9 0 R. T Y U C References Layout Mailings Review View Help Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $4.00 of the overhead is variable with respect to the number of bracelets produced. The customer who is interested in the special bracelet order would like special filigree applied to the bracelets. This filigree would require additional materials costing $2.00 per bracelet and would also require acquisition of a special tool costing $250 that would have no other use once the special order is completed. This order would have no effect on the company's regular sales and the order could be fulfilled using the company's existing capacity without affecting any other order. Required: What effect would accepting this order have on the company's net operating income if a special price of $169.95 per bracelet is offered for this order? SHOW YOUR WORK Should the special order be accepted at this price? Focus O BI du Pll Prtsen Home 59 End 10 S FB $ % 5 & 7 4 6 ,8 9 0