Question :
1. Which of the following statements true regarding special order decisions? A. Special : 1295614
1. Which of the following statements is true regarding special order decisions? A. Special order decisions are long-run decisions.B. Whether or not the company has excess capacity is seldom a consideration.C. Both quantitative and qualitative impacts should be considered.D. The sales price of a special order should never be below the price offered to regular customers.
2. Which of the following would not be a factor in the consideration of whether or not a special order should be accepted? A. Excess capacityB. Variable costsC. Sunk costsD. Qualitative factors
3. Which of the following would not be a factor in the consideration of whether or not a special order is accepted or not? A. Variable costsB. Avoidable fixed costsC. Sales price of the special orderD. Unavoidable fixed costs
4. Which of the following types of costs should always be considered in special order decisions? A. Unavoidable costsB. Relevant costsC. Sunk costsD. Fixed costs
5. Which of the following will never be considered in special order decisions? A. Variable costsB. Fixed costsC. Sunk costsD. Opportunity costs
6. A local science museum normally sells tickets to its museum for $6 each. The daily maximum capacity of the museum is 500 visitors. At the maximum capacity, fixed costs are $3 per visitor and variable costs are $.50 per visitor. A local school group has approached the museum wishing to purchase 25 special passes at a cost of $2.00 each. Assuming the museum has excess capacity, if the special order were accepted, net income would: A. increase by $37.50.B. decrease by $87.50.C. increase by $50.00.D. decrease by $37.50.
7. A local vendor at the county fair sells snow cones for $3 each. When 250 snow cones are sold, each snow cone is estimated to have $.10 in variable costs and $.15 in fixed costs. A local school group plans on attending the fair next week and wishes to purchase 50 snow cones for $.25 each. The vendor can sell as many as 400 snow cones per day. If the special order were accepted, net income would: A. not change.B. decrease by $137.50.C. increase by $12.50.D. increase by $7.50.
8. A local vendor at the county fair sells snow cones for $3 each. When 250 snow cones are sold, each snow cone is estimated to have $.10 in variable costs and $.15 in fixed costs. A local school group plans on attending the fair next week and wishes to purchase 50 snowcones for $.25 each. The vendor can sell as many as 400 snowcones per day.What is the minimum price the vendor should charge for the snowcones? A. $3.00B. $ .25C. $ .10D. $2.75
9. Preston Wade, a local craftsman, normally sells his handcrafted wooden birdhouses for $88 each. Preston has the capacity to produce as many as 50 birdhouses a week. In a normal week, Preston makes 20 birdhouses with the following costs per unit:
Direct materials
$ 5.00
Direct labor
$ 20.00
Variable overhead
$ 4.00
Fixed overhead
$ 2.00
Refer to the Preston Wade information above. Preston has received a special order from a local plant nursery to purchase 25 birdhouses for a price of $90 each. The nursery wishes to have the birdhouses engraved with their own logo, therefore, the order would require the rental of a special engraving tool at a cost of $200.If Preston accepts the special order, net income will increase by: A. $1,525B. $1,325C. $1,275D. $1,475
10. Preston Wade, a local craftsman, normally sells his handcrafted wooden birdhouses for $88 each. Preston has the capacity to produce as many as 50 birdhouses a week. In a normal week, Preston makes 20 birdhouses with the following costs per unit:
Direct materials
$ 5.00
Direct labor
$ 20.00
Variable overhead
$ 4.00
Fixed overhead
$ 2.00
Refer to the Preston Wade information above. Preston has received a special order from a local plant nursery for 25 birdhouses. The nursery wishes to have the birdhouses engraved with their own logo, therefore, the order would require the rental of a special engraving tool at a cost of $200. Preston requires a minimum $2,000 profit on any special order.The minimum price per birdhouse that Preston should charge the nursery is: A. $ 80B. $117C. $ 89D. $119
