Question : 61) Central Services has requested your services in determining the book : 1196069

 

61)

Central Services has requested your services in determining the book values of the following assets, respectively.

 

HistoricalAccumulated

 

 

Costs         Amortization

Auto$ 20,000$ 15,000

Machinery 150,000

95,000

 

General repairs and maintenance for the automobile amounted to $4,000. Machinery maintenance included $2,000 for general upkeep.

 

What are the book values for Auto and Machinery, respectively? 61)

______ A)

$5,000; $55,000 B)

$20,000; $150,000 C)

$35,000; $145,000 D)

$7,000; $56,000 E)

$110,000; $170,000

62)

Which of the following factors would be considered irrelevant when evaluating equipment-replacement decisions? 62)

______ A)

product production costs B)

overhead costs C)

the book value of the old machine D)

useful life of new equipment E)

manufacturing costs

63)

How should the gain or loss on disposal of a an old machine be treated in an equipment replacement decision? 63)

______ A)

added to the accumulated amortization (or deducted from the cost) of the old machine B)

it is irrelevant C)

used to defray installation costs of the new machine D)

deducted from the cost of the new machine E)

deducted from the accumulated amortization

64)

Past costs that are unavoidable and unchangeable are known as 64)

______ A)

fixed overhead costs. B)

sunk costs. C)

constraining costs. D)

operating costs. E)

product production costs.

65)

Electrical Engineering Equipment purchased a machine for $100,000; current accumulated amortization totals $40,000. Management is contemplating the purchase of a new machine for $120,000. Current disposal of the old machine would cost $60,000.

What is the correct category for each item? 65)

______ A)

Sunk: $100,000 cost of old machine, $40,000 accumulated amortization Relevant: $120,000 of new machine, $60,000 of disposal of old machine B)

Sunk: $100,000 cost of old machine Relevant: $120,000 cost of new machine C)

Sunk: $100,000 cost of old machine, $60,000 book value of old machine Relevant: $120,000 cost of new machine, $60,000 disposal of old machine D)

Relevant: $100,000 cost of old machine, $60,000 book value of old machine. Sunk: $120,000 cost of new machine, $60,000 disposal of old machine. E)

Sunk: $100,000 cost of old machine Relevant: $120,000 cost of new machine, $60,000 disposal of old machine

66)

Central Medical Supply, Inc., a manufacturer of medical testing equipment, has $240,000 worth of an obsolete line of testing equipment. The obsolete equipment can be adapted to fit another line of testing equipment at a cost of $64,000; the market value would then be $136,000. However, Tripac offered to purchase the obsolete equipment as is for $88,000.

What are the relevant figures above for management in their decision? 66)

______ A)

($136,000 – $64,000); ($88,000 -240,000) B)

($240,000 + $64,000); ($88,000 – 0) C)

($240,000 + $64,000); ($88,000 – 240,000) D)

($136,000 – $64,000); ($88,000 – 0) E)

($240,000 + $64,000); ($88,000 + 240,000)

67)

Managers tend to favour the alternative that makes their performance look best. This leads to conflicts between which of the following? 67)

______ A)

the accrual accounting model and the performance evaluation model B)

the constraining factor and the performance evaluation model C)

the status quo and the chosen alternative D)

gathering the required information and the performance evaluation model E)

the decision model and the performance evaluation model

68)

If management takes a multiple-year view in the decision model and judges success according to the current year’s results, a problem will occur in the 68)

______ A)

responsibility centre allocation. B)

year-end review model. C)

decision model. D)

performance evaluation model. E)

production evaluation model.

69)

The steps involved in linear programming include all of the following EXCEPT 69)

______ A)

determining the relevant and irrelevant costs. B)

determining the technical coefficients. C)

computing the optimal solution. D)

determining the objective. E)

specify the constraints.

70)

In linear programming, the goals of management are expressed in 70)

______ A)

constraints. B)

an objective function. C)

operating policies. D)

a mathematical inequality or equality. E)

business functions.

71)

A mathematical inequality or equality that must be appeased is known as 71)

______ A)

a business function. B)

a constraint. C)

the optimal solution D)

an operating policy. E)

an objective function.

72)

Computer Products produces two keyboards, Regular and Special. Regular keyboards have a unit contribution margin of $128, and Special keyboards have a unit contribution margin of $720. The demand for Regulars exceeds Computer Products’ production capacity, which is limited by available machine-hours and direct manufacturing labour hours. The maximum demand for Special keyboards is 80 per month. Management desires a product mix that will maximize the contribution toward fixed costs and profits. Direct manufacturing labour is limited to 1,600 hours a month and machine hours are limited to 1,200 a month. The Regular keyboards require 20 hours of labour and 8 machine hours. Special keyboards require 34 labour hours and 20 machine hours. Let R represent Regular keyboards and S represent Special keyboards.

The correct set of equations for the keyboard production process is: 72)

______ A)

Maximize:$720S + $128R

Constraints:Labour hours: 20R + 8S ≤ 1,600

Machine hours: 34R + 20S ≤ 1,200

Special:S ≤ 80

S ≥ 0

Regular:R ≥ 0 B)

Maximize:$128R + $720S

Constraints:Labour hours: 20R + 34S ≤ 1,600

Machine hours: 8R + 20S ≤ 1,200

Special:S ≤ 80

S ≥ 0

Regular:R ≥ 0 C)

Maximize:$720S + $128R

Constraints:Labour hours: 20R + 34S ≤1,600

Machine hours: 8R + 20S ≤ 1,200

Special:S ≤ 80

S ≤ 0

Regular:R ≤ 0

D)

Maximize:$128R + $720S

Constraints:Labour hours: 20R + 34S ≤ 1,600

Machine hours: 8R + 20S ≤ 1,200

Special:S ≥ 80

S ≤ 0

Regular:R ≤ 0 E)

Maximize:$128R + $720S

Constraints:Labour hours: 20R + 34S ≥ 1,600

Machine hours: 8R + 20S ≥ 1,200

Special:S ≤ 80

S ≥ 0

Regular:R ≥ 0