Question : 53.Refer to the information above. Assuming John Boyd wants to : 1259663

 

 

53.Refer to the information above. Assuming John Boyd wants to earn a pretax profit of $10,000 on this special order, what price must it charge Joan Reid?   

A. $69 per unit.

 

B. $83 per unit.

 

C. $95 per unit.

 

D. Some other amount.

 

 

 

JCN Industries normally produces and sells 5,000 keyboards for personal computers each month. Variable manufacturing costs amount to $25 per unit, and fixed costs are $146,000 per month. The regular sales price of the keyboards is $86 per unit. JCN has been approached by a foreign company that wants to purchase an additional 1,000 keyboards per month at a reduced price. Filling this special order would not affect JCN’s regular sales volume or fixed manufacturing costs.

 

54.Refer to the information above. On the basis of the above information only, which of the following is not true?   

A. At the 5,000-unit level of production, JCN’s average cost per unit is $54.20.

 

B. At the 6,000-unit level of production, JCN’s average cost per unit is $49.33.

 

C. It would not be profitable for JCN to consider the special order at a price less than $49 per unit.

 

D. The fixed manufacturing costs of $146,000 is not relevant to this decision regarding the special order.

 

 

 

 

55.Refer to the information above. Assume that the price offered by the foreign company is $43 per unit. Accepting the special order will cause JCN’s operating income to:   

A. Increase by $18,000.

 

B. Decrease by $2,000.

 

C. Decrease by $33,000.

 

D. Decrease by $35,000.

 

 

 

56.Which is an example of joint products?   

A. Sugar and beef.

 

B. Pens and erasers.

 

C. Granulated charcoal and methyl alcohol.

 

D. Iron and plastic.

 

 

 

 

57.Products for which sales of one contribute to the sales of another are called:   

A. Complementary products.

 

B. Competing products.

 

C. Contributory products.

 

D. Codependent products.

 

 

 

 

 

58.Refer to the information above. In deciding whether to rework the tables or sell them as is, management should:   

A. Compare the $305,000 proceeds from the sale of the tables as is, with the $355,000 cost of the tables.

 

B. Compare the $605,000 possible revenue from refinished tables with the total cost of $355,000 plus $315,000 to refinish.

 

C. Compare the $315,000 cost to refinish the tables with the incremental revenue of $300,000 if the tables are refinished.

 

D. Eliminate any alternative that results in a loss on the sale of the product.

 

 

 

 

59.Refer to the information above. Which of the following is not relevant to management’s decision regarding refinishing the tables or selling them as is?   

A. The additional $300,000 revenue that can be generated if the tables are refinished.

 

B. The $355,000 manufacturing cost of the tables already incurred.

 

C. The additional $315,000 cost to refinish the tables.

 

D. The effect of selling “seconds” on Fancy’s reputation as a fine-furniture manufacturer.

 

 

 

 

60.The cost of draining sap out of a maple tree to manufacture maple syrup and maple sugar is an example of:   

A. After-split-off costs.

 

B. Sunk costs.

 

C. Incremental costs.

 

D. Joint costs.

 

 

 

 

61.Products which emerge from a shared manufacturing process are referred to as:   

A. Complementary products.

 

B. Joint products.

 

C. Contributory products.

 

D. Codependent products.

 

 

 

 

62.The Magic Microbrewery has a limited amount of vat capacity available in which it can ferment beer. In deciding which beers to brew, Magic management should consider:   

A. The contribution margins of the individual beers.

 

B. The unit contribution margins of the individual beers.

 

C. The contribution margin ratios of the individual beers.

 

D. The contribution margin per unit of vat capacity of the individual beers.