Question : 81.Department A had gross profit sales of $20,000, contribution margin : 1169192

Accounting

81.Department A had gross profit on sales of $20,000, contribution margin of $12,000, total direct expenses of $8,000, and total indirect expenses of $7,000. Department A has

A. a net income from operations of $5,000.

B. a net income from operations of $4,000.

C. a net loss from operations of $4,000.

D. a net loss of $7,000.

82.The Whippleton Department had gross profit on sales of $120,000, contribution margin of $102,000, total direct expenses of $18,000, and total indirect expenses of $52,000. The Whippleton Department has

A. a net income from operations of $42,000.

B. a net income from operations of $8,000.

C. a net income from operations of $50,000.

D. a net loss from operations $10,000.

83.Which of the following is usually not departmentalized?

A. depreciation expense

B. interest expense

C. payroll taxes expense

D. rent expense

84.Semidirect and indirect expenses are treated the same for accounting purposes. At the end of the accounting period they are

A. recorded by the department they relate to.

B. allocated.

C. charged to headquarters (corporate) general expenses.

D. treated as direct expenses.

85.Which of the following is NOT a limitation to using departmental operating income?

A. It is difficult to determine each department’s fair share of semidirect and indirect expenses.

B. If one department is eliminated, many of the expenses allocated to it would continue.

C. Managers rely more on contribution per department than on income from operations.

D. It highlights the individual department’s financial information.

86.Departmental income statements provide management with information necessary for decision-making. Which of the following is NOT a decision made possible by these statements?

A. where improvements in the profitable departments are needed

B. which departments to expand

C. whether or not to eliminate a department

D. what base to use to allocate costs

87.Prestige Corporation has Sales of $98,500, Indirect Expenses of $26,000, Direct Expenses of $62,400, and Cost of Goods Sold of $49,600. What is Prestige Corporation’s Contribution Margin?

A. $36,100

B. ($13,500)

C. ($39,500)

D. $48,900

88.McKay Corporation has Sales of $147,500, Cost of Goods Sold of $70,200, Direct Expenses of $35,300, and Indirect Expenses of $30,000. What is McKay Corporation’s Contribution Margin?

A. $77,300

B. $47,300

C. $42,000

D. $12,000

89.Cody Reese, manager of Cobra Sports, Ink, decided to eliminate its Division A. Division A had a contribution margin of $14,000 and a loss from operations of $2,500. What other information does Cody need to make the correct decision?

A. which direct expenses will still be incurred.

B. the amount of Cost of Goods Sold.

C. the Gross Profit on Sales.

D. which of the indirect expenses will still be incurred.

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July 1, 2023

81) If the marginal cost of producing a television is constant at $200, then a firm should produce this item.

A) only if the marginal benefit it receives is greater than $200 plus an acceptable profit margin.

B) as long as the marginal benefit it receives is just equal to or greater than $200.

C) as long as its marginal cost does not rise.

D) until the marginal benefit it receives reaches zero.

82) Which of the following is an example of a "how much" decision?

A) The Pleasantville movie theatre is open only in the evenings. The theatre's manager is debating whether to add daily matinee shows.

B) The Zhous have demolished their old home and are debating whether to build a ranch-style house or a Craftsman home.

C) You're planning to hold a graduation party and must decide between having your party catered or having a pot-luck.

D) Chelsea has withdrawn from the swim team to take up a full-time job.

83) Which of the following is an example of a "how much" decision?

A) Octavia is debating whether to buy a pair of Jimmy Choo shoes or Steve Madden boots.

B) Humberto has taken a second job to earn money to buy a Harley-Davidson SuperLow Sportster.

C) You plan on going to Las Vegas for your birthday and are deciding if you should fly or drive.

D) Diana is trying to decide if she should open her pet shop on Sundays.

84) Marginal cost is the ________ associated with undertaking an activity.

A) total cost

B) extra cost.

C) opportunity cost.

D) foregone cost.

85) Cassie's Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively, she can sell the quilt "as is" now for $900. What is her marginal benefit if she sells the quilt "as is" now?

A) $100

B) $900

C) She makes a marginal loss of $600, not a marginal benefit.

D) The marginal benefit cannot be determined.

86) Cassie's Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively, she can sell the quilt "as is" now for $900. What is the marginal cost of completing the task?

A) $200

B) $500

C) $1,000

D) $1,000 plus the value of her time

87) Cassie's Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively, she can sell the quilt "as is" now for $900. What should she do?

A) She should cut her losses and sell the quilt now.

B) It does not matter what she does; she is going to take a loss on her project.

C) She should purchase the period fabric, complete the task and then sell the quilt.

D) She should not do anymore work on the quilt because she has already spent too much time on it and has not been paid for that time.

88) Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service. For a total price of $40, Lionel will also trim shrubs, a service that adds an additional $10 to the total cost of the standard package. What is Lionel's marginal benefit if he sells the standard package?

A) $10

B) $15

C) $25

D) $40

89) Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service. For a total price of $40, Lionel will also trim shrubs, a service that adds an additional $10 to the total cost of the standard package. What is Lionel's marginal cost of adding the shrub-trimming service to the standard package?

A) $10

B) $15

C) $25

D) $40

90) Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service. For a total price of $40, Lionel will also trim shrubs, a service that adds an additional $10 to the total cost of the standard package. Should Lionel continue to offer the shrub-trimming service?

A) Yes, his marginal benefit is greater than his marginal cost.

B) Yes, but only if he raises the price of the standard package.

C) No, his marginal benefit is less than his marginal cost.

D) More information is needed for Lionel to make this decision.