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Question 1 2 Points Which of the following best defines the concept of a relevant cost? A A past cost that differs among alternatives. B
Question 1 2 Points Which of the following best defines the concept of a relevant cost? A A past cost that differs among alternatives. B A future cost that is the same among alternatives. A future cost that differs among alternatives. D A cost that is based on past experience. E A past cost that is the same among alternatives.Consider the following costs and decision-making situations: I. The purchase price of new equipment. in a keep vs. disposal decision. II. the remodeling cost of existing office space. in a firm's decision to stayr at its current location or move to a new building. III. The salary of a supervisor who will be laid off, in a department-closure decision. which of the above costs is (are) relevant to the decision situation noted? Question 3 2 Points The cost of inventory currently owned by a company is an example of a (n): A relevant cost. B opportunity cost. C sunk cost. D differential cost. Question 4 2 Points In early July, Colin Marks purchased a $50 ticket to the December 15 game of the Sarasota Shippers. Parking for the game was expected to cost approximately $22, and Marks would probably spend another $15 for a souvenir program and food. It is now December 14. The Shippers were having a miserable season and the temperature was expected to peak at 5 degrees on game day. Marks therefore decided to skip the game and took his wife to the movies, with tickets and dinner costing $70. The sunk cost associated with this decision situation is: A $70. B None of the answers is correct. C $107. D $50 E $20.Allison is contemplating a job offer with an advertising agency where she will make $38,000 in her first year ofemployment. Alternatively, Allison can begin to work in her father's business where she will earn an annual salary of $54,000. IfAIlison decides to work with her father. the opportunity cost would be: Quesnons Two months ago, Air-tite Corporation purchased 5,400 pounds of Hydrol at price $3.50 per pound, paying $1 8.900. The demand for this product has been very strong since the acquisition. with the market pricejumping to $4.15 per pound. {Airtite can buy or sell Hydrol at this price.) The company recently received a specialorder inquiry. one that would require the use of 4,800 pounds of Hydrol. Which ofthe following is {are} relevant in deciding whether to accept the special order? Two or more of the factors are relevant The $4.15 market price. The $3.50 purchase price. The BOOpound remaining inventory of Hydrol. Elkhorn. Inc.. which has excess capacity, received a special order for 4,200 units at a price of $1 7' per unit. Currently, production and sales are anticipated to be 13.000 units without considering the special order. The variable component of cost ofgoods sold per unit is $6 per unit. If the special order is accepted, the company's income will: increase by $51,700. decrease by $23,200. None ofthe answers is correct. increase by $28,200. decrease by $51,700. Question 8 2 Points Howard Enterprises, which has three departments, recently reported the following results: A B C Sales revenue $18,200 $49,400 $62,400 Less: Operating costs $17,500 $64.500 $80,200 Operating income (loss) $700 $(15,100) $(17,800) The company incurred variable operating costs as well as $39,000 of fixed operating costs. The $39,000 amount was allocated to A, B, and C on the basis of sales revenue and is included in the cost figures noted above. Which department(s), if any, should be closed if none of the fixed operating costs can be avoided? A Departments B and C. B Department B. C Department C. D Department A.Phillippe manufactures A and E from ajoint process {cost = 1593.000). Eleven thousand three hundred pounds of B can be sold at split-off for $16 per pound or processed further at an additional cost of$10.000 and later sold for $18. If Phillippe decides to process 3 beyond the split-off point, operating income will: decrease by 5512.500. increase by $12,600. 6:) decrease by $35200. increase by $35,200. Question 10 Kingston Manufacturing has 10,000 labor hours available for producing X and Y. Consider the following information: Product): ProductY Required labor time per unit {hours} 1 2 Maximum demand (units) 72000 6,000 Contribution margin per unit $6 $ 8 Contribution margin per labor hour $6 $ 4 If Kingston follows proper managerial accounting practices, how many units of Product Y should it produce
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