Question : 61. A business received an offer from an exporter for 20,000 : 1246962

 

 

61. A business received an offer from an exporter for 20,000 units of product at $15 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$21

Unit manufacturing costs:

 

  Variable

12

  Fixed

5

 

 

What is the differential revenue from the acceptance of the offer? A. $300,000B. $420,000C. $120,000D. $240,000

 

62. A business received an offer from an exporter for 10,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$20

Unit manufacturing costs:

 

  Variable

11

  Fixed

1

 

 

What is the differential revenue from the acceptance of the offer? A. $200,000B. $170,000C. $130,000D. $140,000

 

63. A business received an offer from an exporter for 10,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$20

Unit manufacturing costs:

 

  Variable

11

  Fixed

1

 

 

What is the differential cost from the acceptance of the offer? A. $200,000B. $120,000C. $140,000D. $110,000

 

64. A business received an offer from an exporter for 10,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$20

Unit manufacturing costs:

 

  Variable

11

  Fixed

1

 

 

What is the amount of gain or loss from acceptance of the offer? A. $60,000 gainB. $50,000 lossC. $30,000 lossD. $20,000 loss

 

65. A business received an offer from an exporter for 30,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$22

Unit manufacturing costs:

 

  Variable

11

  Fixed

6

 

 

What is the differential cost from the acceptance of the offer? A. $120,000B. $330,000C. $300,000D. $510,000

 

66. A business received an offer from an exporter for 30,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$22

Unit manufacturing costs:

 

  Variable

11

  Fixed

6

 

 

What is the amount of the gain or loss from acceptance of the offer? A. $30,000 lossB. $40,000 gainC. $150,000 gainD. $50,000 gain

 

67. Relevant revenues and costs focus on: A. activities that occurred in the pastB. monies already earned and/or spentC. last year’s net incomeD. differences between the alternatives being considered

 

68. Assume that Penguin Co. is considering disposing of equipment that cost $50,000 and has $40,000 of accumulated depreciation to date. Penguin Co. can sell the equipment through a broker for $25,000 less 5% commission. Alternatively, Teal Co. has offered to lease the equipment for five years for a total of $48,750. Penguin will incur repair, insurance, and property tax expenses estimated at $10,000. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is: A. $15,000B. $ 5,000C. $25,000D. $12,500

 

69. Sparrow Co. is currently operating at 80% of capacity and is currently purchasing a part used in its manufacturing operations for $8 a unit. The unit cost for Sparrow Co. to make the part is $9, which includes $.60 of fixed costs. If 4,000 units of the part are normally purchased each year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease for making the part rather than purchasing it? A. $12,000 cost decreaseB. $4,000 cost increaseC. $20,000 cost decreaseD. $1,600 cost increase

 

70. Heston and Burton, CPAs, currently work a five-day week. They estimate that net income for the firm would increase by $45,000 annually if they worked an additional day each month. The cost associated with the decision to continue the practice of a five-day work week is an example of: A. differential revenueB. sunk costC. differential incomeD. opportunity cost

 

 

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