Question 1.1. What is the process of evaluating financial data that change under alternative courses of action called? (Points : 3)

double entry analysis. contribution margin analysis. incremental analysis. cost-benefit analysis.

Question 2.2. It costs Maker Company $22 of variable and $15 of fixed costs to produce one Panini press which normally sells for $57. A foreign wholesaler offers to purchase 1,000 Panini presses at $40 each. Maker would incur special shipping costs of $5 per press if the order were accepted. Maker has sufficient unused capacity to produce the 1,000 Panini presses. If the special order is accepted, what will be the effect on net income? (Points : 3)

$7,000 increase $13,000 increase $13,000 decrease $22,000 decrease

Question 3.3. A plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price. Which of the following would be true? (Points : 3)

Fixed costs are not relevant. Only variable costs are relevant. The order will likely be accepted. The order will likely be rejected.

Question 4.4. In what type of decision making must opportunity cost be considered? (Points : 3)

in budgeting. in Cost-Volume-Profit analysis in financial accounting. when resources have alternative uses.

Question 5.5. Sutton Inc. can produce 100 units of a component part with the following costs: Direct Materials $130,000 Direct Labor 103,000 Variable Overhead 82,000 Fixed Overhead 62,000 If Sutton Inc. can purchase the component part externally for $345,000 and only $28,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? (Points : 3)

Make and save $99,000 Buy and save $4,000 Make and save $2,000 Buy and save $32,000