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QUESTION 15 If West Star received a special order for 500 computers at a price of $275, what will be the effect on the company's

QUESTION 15

  1. If West Star received a special order for 500 computers at a price of $275, what will be the effect on the company's profit if the order is accepted? (Assume that other variables do not change).

Direct materials

$48

Direct labor

$90

Variable manufacturing overhead

$62

Direct fixed manufacturing overhead

$40

Indirect fixed manufacturing overhead

$40

Increase $7,500

Increase $17,500

$37,500

$2,500

QUESTION 16

  1. Newell Company presently has three product lines: paper, stamps, and computer ribbons The company is considering discontinuing the stamp line. Given the following information, if Newel discontinues the stamp line, what would the net income be?

Sales revenue

$48,000

Variable costs

($30,000)

Direct fixed costs

($12,000)

Indirect fixed costs

($9,000)

Not Loss

($3,000)

Increase by $3,000

Decrease by $6,000

Decrease by $9,000

Decrease by $12,000

QUESTION 17

  1. How much cash will be needed to pay the following general and administrative expenses?

Advertising expense

$4,500

Executive salaries expense

$10,000

Depreciation expense

$5,250

Amortization of patent

$1,225

Interest expense

$750

$15,250

$20,500

$21,725

None of the above

QUESTION 18

  1. Using the following infomration relating to Royal One Company's operations for the monht of July, determine the labor rate variance.

Actual quanity of materials used

11,000 pounds

Standard quantity of materials used

10,000 pounds

Actual price of materials

$4.00

Standard price of materials

$3.80

Actual direct labor hours

20,000

Standard direct labor hours

21,000

Actual direct labor rate

$7.50

Standard direct labor rate

$7.00

$10,000 unfavorable

$10,000 favorable

$10,500 unfavorable

$10,500 favorable

QUESTION 19

  1. Profit center managers are most often evaluaed on the basis of:

A comparison of actual to standard costs

Segment margin

Return on investment

Earnings per share

QUESTION 20

  1. Costs that a manager cannot adjust are called;

Direct costs

Indirect costs

Uncontrollable costs

Segment costs

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