Question : 70.              Assuming Naui has sufficient excess capacity to fill this : 1369898

 

 

70.              Assuming Naui has sufficient excess capacity to fill this special order without affecting sales to current customers, it should:

A)reject the offer since income will decrease by $8,000

B)accept the offer since income will increase by $8,000

C)reject the offer since income will decrease by $4,000

D)accept the offer since income will increase by $4,000

 

 

 

71.Assuming Naui presently sells all the shirts it produces, and therefore would have to cancel some of its current orders to fill the special order, Naui should:

A)reject the offer since income will decrease by $18,000

B)accept the offer since income will increase by $18,000

C)reject the offer since income will decrease by $14,000

D)accept the offer since income will increase by $14,000

 

72.              Direct labor is an example of a:

A)unit-related cost.

B)batch-related cost.

C)facility-sustaining cost.

D)product-sustaining cost.

 

 

73.              Salaries of product-line managers are an example of a/an

A)unit-related cost.

B)batch-related cost.

C)facility-sustaining cost.

D)product-sustaining cost.

 

74.              Qualco inspects 10% of each raw material shipment received. The inspection costs are an example of a/an

A)unit-related cost.

B)batch-related cost.

C)facility-sustaining cost.

D)product-sustaining cost.

 

 

75.              The cost associated with maintaining the manufacturing equipment daily is a/an

A)unit-related cost.

B)batch-related cost

C)facility-sustaining cost

D)product-sustaining cost

 

 

 

 

 

 

 

 

76.              Nowlin & Rudder is a manufacturer of sports equipment.  It has been approached by a large European retailer about the possibility of producing a special order of tennis rackets.  Under which of the following conditions should Nowlin & Rudder accept this offer?

A)The firm has the capacity to produce the special order.

B)The firm has the capacity to produce the special order and the special-order price exceeds the fixed cost related to of the special order.

C)The firm has the capacity to produce the special order and the special-order price exceeds the total variable cost of the special order.

D)The firm has the capacity to produce the special order and the special-order price exceeds the incremental cost of the special order.

 

 

77.              Cameron Company is considering discontinuing production of one of its products and buying the product instead. Which of the following would not be relevant to this decision?

A)opportunity costs

B)incremental costs

C)product quality

D)sales price

 

78.              Nichols Corporation is trying to decide whether to sell its carpet-quality thread or to manufacture the carpets itself.  Under which of the following conditions should Nichols sell its thread?

A)The incremental revenue from further processing is less than the incremental costs.

B)The incremental revenue from further processing is greater than the incremental costs.

C)The incremental cost from further processing is less than the cost of manufacturing the thread.

D)The incremental cost from further processing is greater than the cost of manufacturing the thread.

 

 

79.              A product line should be temporarily discontinued if

A)it is operating at a loss.

B)it is failing to produce the desired profit.

C)the relevant costs saved exceed the relevant revenue lost

D)dropping the product line will adversely affect remaining workers.