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Use this list of terms to complete the sentences that follow: A) Long-range planning B) Participative budgeting C) Sales forecast D) Operating budgets E) Master budget F) Financial budgets G) Relevant cost H) Sunk cost I) Opportunity cost J) Joint costs 1. Costs that have already been incurred and will not be changed or avoided by any present or future decisions 2. are used as the basis for the preparation of the budgeted income statement. 3. The is a set of interrelated budgets that constitutes a plan of action for a specified time period. 4. all costs incurred prior to the point at which the two products are separately identify able Joint Products Multiple end-products produced from a single raw material and a common production process. 5. Lower-level managers are more likely to perceive results as fair and achievable under a approach. 6. focus primarily on the cash resources needed to fund expected operations and planned capital expenditures. 74 In incremental analysis, the only factors to be considered are those costs and revenues that differ across alternatives. 8. shows potential sales for the industry and a company's expected share of such sales. 9. Often in choosing one course of action, the company must give up the opportunity to benefit from some other course of action. 10. these goals, and develops policies and plans to implement the strategies Question :2 E7.2 Gruden Company produces golf dises which it nomally sells to retailers for $7 ench. The cost of manufacturing 20000 golf dises is: Gruden also incurs 5% sales commission (50.35) on each dise sold. McGee Corporation offers Gruden $4.80 per disc for 5,000 dises, McGee would sell the dises under its own brand name in foreign markets not yet served by Gruden. If Gruden accepts the offer, its fixed overhend will increase from $40.000 to $46.000 due to the purchase. of a new imprinting machine. No sales cocnmission will result from the spectal order. Instrucfions: (a) Prepare an incremental analysis for the special order. (b) Should Gruden nccept the specinl order? Why or why not? (c). What assumptions underlie the decision mnde in port (b)? E7.7 Gibhs Company purchases satis and produces sailbonts. It currently produces 1,200 sailboats per year, operating at norinal capacity, which is about sopi of full cagiocits Gibbs Purchases sails at $250 ench, but the company ls considering uaing the evcess capacity to materials, $80 for direct labor. and $100 for overhest per sail would be $100 for direct $78,000 of annual fixed overhead and $100 for overhead. The $100 overhead is based on The president of Glbbs has come is allocated using normal cupacity. the sails," she says, "but only $250 to bo you for advice. "It would cost me 5280 to make missed something?" Instructions (a) Prepare a per unit analysis of the differential cosis. Brielly explain whether Gibbs: should make or buy the sails. (b) If Gibbs suddenly finds an opportanity to rent out the umused capacity of its lactory for $77,000 per year, would your answer to part fa) change? Briefly explnin. (c) Identify three qualitative factoos that should be considered by Gibbs in this make-orbuy decision. Answer Sheot Answer Question :1 Section: A Calculation - Choose only (TWO) question Answer Question : 2 Answor Question :3 a) Answer Question : 4