Question : 41. Activity-based costing determined by charging products for only the services : 1239639

 

 

41. Activity-based costing is determined by charging products for only the services (activities) they used during production.  

 

42. Cost plus methods determine the normal selling price by estimating a cost amount per unit and adding a markup.  

 

43. Under the total cost concept, manufacturing cost plus desired profit is included in the total cost per unit.  

 

44. Under the variable cost concept, only variable costs are included in the cost amount per unit to which the markup is added.  

 

45. The desired selling price for a product will be the same under both variable and total cost.  

 

46. The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed: A. manufacturing marginB. contribution marginC. differential costD. differential revenue

 

47. The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative is termed: A. period costB. product costC. differential costD. discretionary cost

 

48. A cost that will not be affected by later decisions is termed a(n): A. period costB. differential costC. sunk costD. replacement cost

 

49. The condensed income statement for a business for the past year is presented as follows: 

 

Product

 

 

F

G

H

Total

Sales

$300,000

$210,000 

$340,000

$850,000

Less variable costs

  180,000

  190,000 

  220,000

  590,000

Contribution margin

$120,000

$  20,000 

$120,000

$260,000

Less fixed costs

    50,000

    50,000 

    40,000

  140,000

Income (loss) from oper.

$  70,000

$ (30,000)

$  80,000

$120,000

 

 

 

 

 

Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G? A. $20,000 increaseB. $30,000 increaseC. $20,000 decreaseD. $30,000 decrease

 

50. The condensed income statement for a business for the past year is as follows: 

 

Product

 

    T

    U

Sales

$660,000 

$320,000

Less variable costs

  540,000 

  220,000

Contribution margin

$  120,000 

$100,000

Less fixed costs

  145,000 

    40,000

Income (loss) from operations

$ (25,000)

$  60,000

 

 

 

Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product U. What is the amount of change in net income for the current year that will result from the discontinuance of Product T? A. $120,000 increaseB. $250,000 increaseC. $25,000 decreaseD. $120,000 decrease

 

 

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