Question
1- PH Toy is uncertain of whether to sell its product assembled or else unassembled. The unit cost of the unassembled product is $36 as well as PH Toy would sell it for $78. The cost to accumulate the product is $25 per unit as well as PH Toy believes the market would support a price of $102 on the assembled unit. What decision must PH Toy Company make?
A) Sell before assembly the company will be better off by $1 per unit
B) Sell before assembly the company will be better off by $24 per unit
C) Process further the company will be better off by $35 per unit
D) Process further the company will be better off by $17 per unit
2- Which of the following isn't a benefit of budgeting?
A) It promotes efficiency
B) It deters waste
C) It is a base for performance evaluation
D) It promises the company that management will perform at a particular operating level
3. The transfer price approach that theoretically must work the best is the
A) cost-based approach
B) market-based approach
C) Negotiated price approach
D) Time and material pricing approach
4. Which statement is true of an opportunity cost?
A) It is the cost of a special order option
B) It is always variable
C) It is the probable benefit as a result of following an alternative course of action
D) It is a sunk cost
5. Hermantic Inc can produce 100 units of a component part with the following costs-
Direct Materials $45,000
Direct Labor $20,000
Variable Overhead $48,000
Fixed Overhead $33,000
If Hermantic Inc procurements the components outside for $120,000 by what amount will its total costs change if none of the fixed overhead is avoidable?
A) An increase of $120,000
B) An increase of $26,000
C) An increase of $7,000
D) A decrease of $33,000
6. The cost-plus pricing approach's major benefit is
A) It considers customer demand
B) That sales volume has no effect on per unit costs
C) It is simple to compute
D) It can be used to determine a product's target cost
7. Seville Company manufactures a product with a unit variable cost of $42 as well as a unit sales price of $75. Fixed costs were $80000 when 10,000 units were produced and sold. The company has an erstwhile opportunity to sell an additional 2,000 units at $55 each in an international market which wouldn't affect its present sales. The company has adequate capacity to produce the additional units. How much is the pertinent income effect of accepting the special order?
A) $84,000
B) $40,000
C) $26,000
D) $10,000
8 Which of the subsequent scenarios would make a manager indifferent about selling a product at the split-off point or else processing it further?
A) When incremental revenues > incremental costs
B) When incremental revenues < incremental costs
C) When incremental revenues = incremental costs
D) When incremental revenues > joint costs
9. Which of the subsequent will make the most effective environment for budget acceptance?
A) The budget is prepared by top management
B) The budget preparation contains input from all levels of management
C) The budget is prepared by department heads
D) Acceptance has nothing to do with who prepares budgets
10. The supreme transfer price from the buying division's standpoint is the
A) Total cost + opportunity cost
B) Variable cost + opportunity cost
C) External purchase price
D) External purchase price + opportunity cost