Question 22:

Cheyenne Enterprises manufactures Nuts and Bolts from a joint process (cost = $85,000). Six thousand pounds of Nuts can be sold at split-off for $15 per pound; fifteen thousand pounds of Bolts can be sold at split-off for $10 per pound. For product costing purposes Cheyenne allocates joint costs using the relative sales value method. The amount of joint cost allocated to Nuts and Bolts, respectively, would be:

Multiple Choice

$34,000 and $34,000.

$34,000 and $31,875.

$53,125 and $31,875.

$31,875 and $53,125.

$31,875 and $34,000.

Question 30

Flagler Electronics currently sells a camera for $340. An aggressive competitor has announced plans for a similar product that will be sold for $255. Flagler's marketing department believes that if the price is dropped to meet competition, unit sales will increase by 10%. The current cost to manufacture and distribute the camera is $225, and Flagler has a profit goal of 30% of sales. If Flagler meets competitive selling prices, what is the company's target cost?

Multiple Choice

$76.50.

$102.00.

$225.00.

$238.00.

$178.50.

Question 32

Bowers Company plans to incur $201,000 of salaries expense and produce $337,000 of additional sales revenue if a capital project is implemented. Assuming a 20% tax rate, these two items collectively should appear in a capital budgeting analysis as:

Multiple Choice

None of the answers is correct.

a $108,800 outflow.

a $108,800 inflow.

a $27,200 outflow.

a $27,200 inflow.

Question 34

Tempest Enterprises had a sales margin of 8%, sales of $4,900,000, and invested capital of $5,900,000. The company's ROI was:

Multiple Choice

None of the answers is correct.

15.05%.

12.50%.

8.89%.

6.64%.

Question 35:

In early July, Damon Rutton purchased a $90 ticket to the December 15 game of the Sarasota Shippers. Parking for the game was expected to cost approximately $22, and Rutton 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. Damon is thinking about skipping the game and taking his wife to the movies and dinner, at a cost of $70. The amount of sunk cost that should influence Damon's decision to spend some time with his wife is:

Multiple Choice

None of the answers is correct.

$90.

$70.

$20.

$0.