Question 40 (2 points) Saved Gallop Credit Agency uses a standard cost system for the processing of its credit applications. The labour standard at Gallop is 10 applications per 8- hour day at a standard rate of $15 per hour. During the last pay period, Gallop's credit agents worked 1,920 hours and processed 2,500 applications. The total labour cost for the agents during this period was $29,184. What was Gallop's labour rate variance for this last pay period? 1) $384 U 2) $384 F 3) $1,200 U 4) $1,200 F Next Page Page 40 of 50 Question 41 (2 points) Saved The following information relates to next year's projected operating results of the Yogurt division of YaoYao Corporation: Contribution margin Fixed expenses Net operating loss $1,000,000 $1.300.000 $(300,000) The Yogurt division is ONE of the three operating divisions of YaoYao Corporation. If the Yogurt division is eliminated, $800,000 of the above fixed expenses could be avoided. What will be the effect on YaoYao's profit next year if Yogurt Division is eliminated? 1) $300,000 increase. 2) $300,000 decrease. 3) $200,000 decrease. 4) $200,000 increase. Next Page Page 41 of 50 Question 42 (2 points) Saved Ant Manufacturing Pte Ltd produces three different products. The company is encountering a shortage of raw materials due to supply chain issues. The company needs to make a decision on which products to emphasize. In making such decisions, products should be ranked based on 1) selling price per unit 2) contribution margin per unit O 3) contribution margin per unit of the constraining resource 4) unit sales volume Question 43 (2 points) Saved Future costs that differ across alternatives describe 1) relevant costs 2) target cost 3) full costs 4) activity-based costs Next Page Page 43 of 5C Question 44 (2 points) Saved A decision to make a component internally versus buying from an external supplier is a 1) special-order decision O2) make-or-buy decision 3) keep-or-drop a product-line decision 4) Both b and c. Next Page Page 44 of 50 Question 45 (2 points) Saved If there is excess capacity, the minimum acceptable price for a special order must cover 1) variable costs associated with the special order 2) variable and fixed manufacturing costs associated with the special order 3) variable and incremental fixed costs associated with the special order 4) None of the above answers Next Page Page 45 of 50 Question 46 (2 points) Saved In considering a make or buy situation that will enable a company to make use of currently idle capacity, which of the following costs would be irrelevant? 1) Direct materials. 2) Depreciation. 3) Direct labour. 4) Variable factory overhead. Next Page Page 46 of 50 Question 47 (2 points) Saved Dayson Corporation makes 30,000 motors to be used in the production of its vacuum cleaners. The average cost per motor at this level of activity is as follows: Direct materials Direct labour. Variable manufacturing overhead. Fixed manufacturing overhead...... $95.00 $86.00 $37.50 $43.50 This motor has recently become available from an outside supplier for $250 per motor. If Dayson decides not to make the motors, none of the fixe manufacturing overhead would be avoidable and there would be no other use for the facilities. What would be the impact on the company's overall net operating income of buying the motors from the outside supplier? 1) $360,000 lower 2) $2,070,000 higher 3) $945,000 lower per motor. If Dayson decides not to make the motors, none of the fixed manufacturing overhead would be avoidable and there would be no other us for the facilities. What would be the impact on the company's overall net operating income of buying the motors from the outside supplier? O 1) $360,000 lower 2) $2,070,000 higher 3) $945,000 lower 4) $1,305,000 higher Question 48 (2 points) Saved Firms may be asked to accept a special order of their product for a reduced price if 1) the order is from a government agency 2) the plant has excess capacity 3) the order is small 4) the plant is producing at maximum capacity Next Page Page 48 of 50 Question 50 (2 points) Concord Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Total $75,000 120,000 45,000 60,000 $300.000 An outside supplier has offered to sell the component for $7.50. What is the effect on income if the company purchases the component from the outside supplier? 1) $30,000 increase. 2) $30,000 decrease. 3) $60,000 decrease. 4) No change