Question :
41. Which of the following costs an example of a product-level : 1208243
41. Which of the following costs is an example of a product-level cost?
A. Inventory holding costs
B. Machine setup costs
C. Materials and labor costs
D. Shipping and handling costs
42. Which of the following costs is an example of a batch-level cost?
A. Assembly setup costs
B. Materials handling costs
C. Shipping and handling costs to ship an order to a customer
D. All of the other answers are correct.
43. Engineering design costs are generally referred to as:
A. Batch-level costs.
B. Facility-level costs.
C. Product-level costs.
D. Unit-level costs.
44. The Storyteller Publishing Company is trying to decide whether or not to accept a special order for its latest blockbuster. In making this decision, which level of costs will most likely be relevant to the decision?
A. Unit-level costs
B. Facility-level costs
C. Product-level costs
D. All of the other answers are correct.
45. The costs and revenues associated with two alternatives are listed below:
Which alternative should be selected based on this information?
A. Alternative 1 because it has a higher profit.
B. Alternative 2 because it has higher revenue.
C. Alternative 1 because it has fewer unit-level costs.
D. Alternative 2 because it has a higher profit.
46. Gleam Clean cleans and waxes floors for commercial customers. The company is presently operating at less than capacity with equipment and employees at times idle. The company recently received an order from a potential customer outside the company’s normal geographic service region for a price of $9,000. The size of the proposed job is 22,000 square feet. The company’s normal service costs are as follows:
If the company accepts the special offer:
A. The company will lose $4,420 on the job.
B. The company will lose $2,220 on the job.
C. The company will lose $460 on the job.
D. The company will earn $5,040 on the job.
47. The Clear Music Company produces and sells a desktop speaker for $100. The company has the capacity to produce 50,000 speakers each period. At capacity, the costs assigned to each unit are as follows:
The company has received a special order for 1,000 speakers. If this order is accepted, the company will have to spend $10,000 on additional costs. Assuming that no sales to regular customers will be lost if the order is accepted, at what selling price will the company be indifferent between accepting and rejecting the special order?
A. $100
B. $55
C. $45
D. $65
48. Great Products Company currently outsources an electrical switch that is a component in one of its products. The switches cost $20 each. The company is considering making the switches internally at the following projected annual production costs:
The company expects an annual need for 5,000 switches. If the company makes the product, it will have to utilize factory space currently being leased to another company for $1,500 a month. If the company decides to make the parts, total costs will be:
A. $30,500 more than if the switches are purchased.
B. $27,000 less than if the switches are purchased.
C. $20,000 less than if the switches are purchased.
D. $10,500 more than if the switches are purchased.
49. Serious Safety Products currently outsources an electrical switch that is a component in its sprinkler systems. The switches are purchased for $20 each. The company is considering making the switches internally and has conducted a study to determine the costs involved. The costs below are projected annual production costs:
Assume that the company needs 10,000 of the switches, which would be produced in two batches. Assume also that the company will still be operating within the relevant range. If Serious Safety decides to make the parts under these conditions, the total relevant costs will be:
A. $127,500.
B. $102,500.
C. $107,500.
D. $122,500.
50. All of the following are variables that could be considered in a decision to outsource a component that is currently being produced in house. Which of the following is not likely to be relevant?
A. The book value of equipment used in making the component
B. The impact on employee morale
C. The importance of vertical integration to the company
D. The reliability of the supplier
