QUESTION 1 ABC Corporation manufactures three products. Because ofa recent lack of skilled wood carvers, the corporation has had a shortage of available labor hours. The following per unit data relates to the three products of the corporation: Letter Openers Elvis Statues Candle Holders Selling price $30 $80 $42 Variable cost $21 $40 $20 Labor hours required 1 6 2 Assume that ABC Corporation only has 1,800 labor hours available next month. Also assume that ABC Corporation can only sell 800 units of each product in a given month' What is the maximum amount of contribution margin that ABC Corporation can generate next month given this labor hour shortage? 19,400 QUESTION 2 At ABC Corporation, indirect labor is a variable cost that varies with direct labor-hours. Last month's performance report showed that actual indirect labor cost totaled 7,450 for the month and that the associated spending variance was 3560 F. If 18,000 direct labor-hours were actually worked last month, then the flexible budget cost for indirect labor must be (per direct labor-hour) closest to: O A. $0.75 8. $0.45 0 C. 0.85 0 D. 30.65 QUESTION 3 which of the following segment performance measures will decrease if there is an increase in the interest expense for that segment? Return on Investment Residual Income A) Yes Yes B) NO VeS C) Yes No D) N0 N0 0 A. Choice A O B. Choice B O C. Choice C O D. Choice D QUESTION 7 ABC Company has the following production data: Throughput time 4 hours Delivery cycle time 6 hours Process time 2 hours Wait time before production 1 hour The manufacturing cycle efficiency (MCE) for ABC Company is: O A. 50% O B. 25% O C. 20% O D. 75% QUESTION 8 ABC Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 17,000 ofthe components each year. The unit product cost of the component according to the company's cost accounting system is given as follows: Direct materials $11.50 Direct labor 9.70 Variable manufacturing overhead 1.20 Fixed manufacturing overhead 4.39 Unit product cost $26.70 Assume that direct labor is a variable cost. Of the xed manufacturing overhead, 70% is avoidable ifthe component were bought from the outside supplier. In addition, making the component uses 2 minutes on the machine that is the company's current constraint. If the component were bought, time would be freed up for use on another product that requires 4 minutes on this machine and that has a contribution margin of $8.00 per unit. When deciding whether to make or buy the component, what cost of making the component should be compared to the price of buying the component? (Round your intermediate calculations to 2 decimal places.) O A. $24.21 per unit 0 B. $25.50 per unit 0 C. $29.41 per unit 0 D. $22.00 per unit QUESTION 9 The standard cost card for one unit ofa nished product shows the following: Standard Quantity or Hours Standard Price or Rate Direct materials 12 feet 3? per foot Direct labor 1.5 hours 512 per hour Variable manufacturing overhead 1.5 hours $8 per hour Ifthe total standard variable cost for one unit of finished product is $54, then the standard price per foot for direct materials is: QUESTION 10 ABC Corporation is preparing a bid fora special order that would require 870 liters of material W34C. The company already has 780 liters of this raw material in stock that originally cost $8.35 per liter. Material W34C is used in the company's main product and is replenished on a periodic basis. The resale value of the existing stock ofthe material is $7.60 per liter. New stocks of the material can be readily purchased for $8.40 per liter. What is the relevant cost of the 870 liters of the raw material when deciding how much to bid on the special order? (Round final answer to the full number) QUESTION 11 ABC Corporation is considering the addition ofa new product, The expected cost and revenue data for the new product are as follows: Annual sales 2,500 units Selling price per unit $304 Variable costs per unit: Production $125 Selling $49 Avoidable fixed costs per year: Production $50,000 Selling $75,000 Allocated common fixed corporate costs per year 5 55,000 Ifthe new product is added, the combined contribution margin of the other, existing products is expected to drop $45,000 per year. Total common xed corporate costs would be unaffected by the decision ofwhether to add the new product. At what selling price would the new product bejust breaking even? 0 A. $246 per unit 0 E. 15250 per unit 0 c. 5242 per unit 0 D. 5232 per unit QUESTION 12 A cost that is traceable to a segment through activity-based costing is always an avoidable cost for decision making. 0 True 0 False QUESTION 13 ABC Company recorded for the past year sales of $750,000 and average operating assets of $375,000, What is the margin that Largo Company needed to earn in order to achieve an ROI of 15%? O A. 2% O 315% O C. 10% OD,8% QUESTION 14 ABC Inc has some material that originally cost $74,600. The material has a scrap value of $54,700 as is, but if reworked at a cost of $1,500, it could be sold for $54,400 What would be the nancial advantage (disadvantage) of reworkingand selling the material rather than selling it as is as scrap? to A. ($1,800) 0 a. ($5,700) 0 c. (54,500) 0 D. $52,900