Question : 61. When evaluating a special order, management should:A.  Only accept : 1256625

 

 

61. When evaluating a special order, management should:A.  Only accept the order if the incremental revenue exceeds all product costs.B.  Only accept the order if the incremental revenue exceeds fixed product costs.C.  Only accept the order if the incremental revenue exceeds total variable product costs. D.  Only accept the order if the incremental revenue exceeds full absorption product costs.E.  Only accept the order if the incremental revenue exceeds regular sales revenue.

 

 

 

 

 

62. A company is currently operating at 80% capacity producing 5,000 units. Current cost information relating to this production is shown in the table below: 

 

Per Unit

Sales price

$34

Direct material

$2

Direct labor

$3

Variable overhead

$4

Fixed overhead

$5

The company has been approached by a customer with a request for a 100-unit special order. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?A.  Any amount over $34 per unit.B.  Any amount over $20 per unit.C.  Any amount over $14 per unit.D.  Any amount over $9 per unit.E.  Any amount over $5 per unit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

63. A company is currently operating at 75% capacity and producing 3,000 units. Current cost information relating to this production is shown in the table below: 

 

Per Unit

Sales price

$43

Direct material

$7

Direct labor

$6

Variable overhead

$4

Fixed overhead

$4

The company has been approached by a customer with a request for a 200-unit special. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?A.  Any amount over $43 per unit.B.  Any amount over $17 per unit.C.  Any amount over $21 per unit.D.  Any amount over $13 per unit.E.  Any amount over $22 per unit.

 

 

64. Which of the following best describes costs assigned to the product under the absorption costing method?Direct labor (DL)Direct materials (DM)Variable selling and administrativeVariable manufacturing overheadFixed selling and administrativeFixed manufacturing overheadA.  DL, DM, variable selling and administrative costs, and variable manufacturing overhead.B.  DL, DM, and variable manufacturing overhead.C.  DL, DM, variable manufacturing overhead, and fixed manufacturing overhead.D.  DL and DM.E.  DL, DM, fixed selling and administrative, and fixed manufacturing overhead.

 

 

65. Which of the following best describes costs assigned to the product under the variable costing method?Direct labor (DL)Direct materials (DM)Variable selling and administrativeVariable manufacturing overheadFixed selling and administrativeFixed manufacturing overheadA.  DL, DM, variable selling and administrative costs, and variable manufacturing overhead.B.  DL, DM, and variable manufacturing overhead.C.  DL, DM, variable manufacturing overhead, and fixed manufacturing overhead.D.  DL and DM.E.  DL, DM, fixed selling and administrative, and fixed manufacturing overhead.

 

 

66. Assume a company sells a given product for $75 per unit. How many units must be sold to break-even if variable selling costs are $12 per unit, variable production costs are $23 per unit, and total fixed costs are $700,000?A.  11,112 units.B.  13,462 units.C.  9,334 units.D.  17,500 units.E.  6,363 units.

 

 

67. Assume a company sells a given product for $90 per unit. How many units must be sold to break even if variable selling costs are $2 per unit, variable production costs are $31 per unit, and total fixed costs are $1,799,946?A.  31,578 units.B.  19,995 units.C.  20,454 units.D.  14,634 units.E.  899,973 units.

 

 

68. Assume a company sells a given product for $12 per unit. How many units must be sold to break even if variable selling costs are $0.50 per unit, variable production costs are $3.50 per unit, and total fixed costs are $4,500,000?A.  391,305 units.B.  562,500 units.C.  529,412 units.D.  281,250 units.E.  375,000 units.

 

 

 

 

 

 

 

 

 

 

69. Shore Company reports the following information regarding its production cost. 

Units produced

28,000 units

Direct labor

$23 per unit

Direct materials

$24 per unit

Variable overhead

$280,000 in total

Fixed overhead

$94,920 in total

Compute production cost per unit under absorption costing.A.  $57.00B.  $60.39C.  $47.00D.  $23.00E.  $24.00

 

 

70. Shore Company reports the following information regarding its production cost: 

Units produced

28,000 units

Direct labor

$23 per unit

Direct materials

$24 per unit

Variable overhead

$280,000 per unit

Fixed overhead

$94,920 in total

Compute production cost per unit under variable costing.A.  $57.00B.  $60.39C.  $47.00D.  $23.00E.  $24.00

 

 

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