Question : 11) Boyd Tool Company a tool manufacturer. Production capacity 3,000 : 1185989

Accounting

11) Boyd Tool Company is a tool manufacturer. Production capacity is 3,000 units per month; however, they are considering alternative ways to increase capacity to 3,500 units. One of the alternatives involves purchasing new equipment. In this alternative, there are two choices: machine A will provide increased capacity of 4,000 units per month, with unit costs of $14 at capacity; and, machine B will increase capacity to 3,600 units per month with unit costs of $15 at capacity. Both machines are adequate since Boyd’s does not intend to go beyond the 3,500 units per month level for the foreseeable future.

Relevant information for this decision includes

A) whether other costs will change solely due to a capacity increase.

B) the different unit cost of production between the two machine at their capacity levels.

C) Boyd’s planned capacity utilization.

D) excess capacity of either machine.

E) the different unit cost of production between the two machines at Boyd’s planned capacity levels.

12) First Image has a plant capacity of 80,000 units per month. Unit costs at capacity are:

Direct materials

$2.00

Direct labour

3.00

Variable overhead

1.50

Fixed overhead

1.50

Marketing – Fixed

3.50

Marketing/distribution – Variable

1.80

Current monthly sales are 78,000 units at $12.60 each. Computer Output Management has contacted First Image about purchasing 2,000 units at $12.00 each. Current sales would not be affected by the special order. What is First Image’s change in profits if the order is accepted?

A) $7,400 increase

B) $8,600 increase

C) $4,400 increase

D) $2,600 decrease

E) $3,600 decrease

13) Precision Sewing Company incorporates the services of Rosie’s Sewing. Precision purchases pre-cut dresses from Rosie’s. This is primarily known as

A) insourcing.

B) outsourcing.

C) product needs analysis.

D) product specialization.

E) qualitative analysis.

14) Anchor Sign Company manufactures signs from direct materials to the finished product. This is an example of which of the following?

A) insourcing

B) outsourcing

C) product needs analysis

D) product specialization

E) utilization of idle facilities

15) Omark Corporation currently manufactures a subassembly for its main product. The variable costs per unit are $48, in addition to a $6 charge based on estimated selling expenses.

R-Corp has contacted Omark with an offer to sell them 5,000 of the subassemblies for $44.00 each. Omark will eliminate $50,000 of fixed overhead if it accepts the proposal.

What is increase or decrease in profit from accepting the offer?

A) $50,000 increase

B) $100,000 increase

C) $170,000 increase

D) $50,000 decrease

E) $70,000 increase

16) When considering a project that will require production using otherwise idle resources, which of the following are true?

A) Avoidable fixed costs are irrelevant.

B) Only the variable costs of the project are relevant.

C) Only financial factors should be considered.

D) The project should not be undertaken if total revenue from the project is less than the total costs of production.

E) In the short run, even if revenue is less than the total costs of production, the project could help the company’s overall operating income.

Northwoods manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $90 per table, consisting of 80% variable costs and 20% fixed costs. The company has surplus capacity available. It is Northwoods’ policy to add a 50% markup to full costs.

17) Northwoods is invited to bid on a one-time-only special order to supply 100 rustic tables. What is the lowest price Northwoods should bid on this special order?

A) $6,300

B) $7,200

C) $10,800

D) $13,500

E) $9,000

Answer the following question(s) using the information below.

Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has excess capacity. The following per unit data apply for sales to regular customers:

Variable costs:

Direct materials

$40

Direct labour

Manufacturing support

Marketing costs

Fixed costs:

Manufacturing support

Marketing costs

Total costs

$170

Markup (50%)

Targeted selling price

$255

18) What is the full cost of the product per unit?

A) $110

B) $170

C) $255

D) $95

E) $140

19) What is the contribution margin per unit?

A) $85

B) $110

C) $145

D) $160

E) $195

20) For Welch Manufacturing, what is the minimum acceptable price of this special order?

A) $110

B) $140

C) $170

D) $240

E) $255

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July 1, 2023

1) Members of OSHA's $100,000 club have:

A) invested more than $100,000 in health and safety equipment for employees.

B) purchased health and safety insurance coverage of at least $100,000.

C) received fines of $100,000 or more for safety or health violations.

D) paid more than $100,000 in workers' compensation claims.

2) Workplace safety is a significant issue because approximately ________ employees were injured on the job in 2009.

A) 3,000,000

B) 1,000,000

C) 500,000

D) 250,000

3) According to the doctrine of contributory negligence, employers were:

A) not responsible for an employees' injury when another employee's negligence caused the injury.

B) not liable for an employee's injuries when that employee's own negligence caused the injury.

C) responsible for compensating employees for all work-related illnesses and accidents.

D) not responsible for any employees' injuries under any circumstances.

4) Workers' compensation laws vary by state, but all are built on the theory that:

A) employees' personal health insurance should pay the medical costs of any injuries.

B) work-related accidents are costs of doing business and should be paid for by employers.

C) governments are responsible for paying the medical costs related to an employee's injuries.

D) employers are not responsible for employee injuries resulting from the employee's own negligence.

5) Which of the following is a true statement about workers' compensation?

A) Workers' compensation laws are federally mandated and enforced by OSHA.

B) Non-union firms are not required to carry workers' compensation insurance.

C) Workers' compensation is not mandatory in all U.S. states.

D) Most states had workers' compensation programs by 1911.

6) Workers' compensation:

A) pays only if the worker cannot.

B) is considered a no-fault system.

C) is mandatory in all fifty states.

D) covers employees' medical costs with Medicaid.

7) The primary goal of state workers' compensation laws is best described as:

A) providing a means for injured workers to receive care and income without having to sue.

B) determining the cause of work-related accidents and minimizing future accidents.

C) ensuring that employers are not held responsible for accidents caused by worker negligence.

D) spreading the cost of workplace accidents among all workers in the state.

8) The ________ holds that employers are not held liable for an employee's injuries when the negligence of another employee contributed to or caused the accident.

A) doctrine of contributory negligence

B) fellow-servant rule

C) general duty provision

D) "no-fault" rule

9) Which of the following is most likely true?

A) Workers' compensation is a federal program. OSHA is the organization that helps individual states meet workers' compensation standards.

B) Workers' compensation is a federal program that provides compensation to employees injured on the job. OSHA is a federal program that creates and enforces safety standards in the work place.

C) OSHA is a federal program that creates safety standards for work environments. Workers' compensation programs are created by the individual states to provide compensation for employees injured on the job.

D) OSHA is a federal program that provides compensation for employees injured on the job. Workers' compensation programs are state programs that provide compensation for employees injured on the job.

10) Workers' compensation:

A) replaces the worker's entire income until he/she is able to work again.

B) provides benefits for permanent, but not temporary, impairment.

C) gives survivors burial allowances and income benefits.

D) covers medical expenses up to $100,000.