Question :
41. The amount of increase or decrease in revenue that expected : 1233926
41. The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed: A. manufacturing marginB. contribution marginC. differential costD. differential revenue
42. The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative is termed: A. period costB. product costC. differential costD. discretionary cost
43. A cost that will not be affected by later decisions is termed a(n): A. historical costB. differential costC. sunk costD. replacement cost
44. The condensed income statement for a business for the past year is presented as follows:
Product
F
G
H
Total
Sales
$300,000
$220,000
$340,000
$860,000
Less variable costs
180,000
190,000
220,000
590,000
Contribution margin
$120,000
$ 30,000
$120,000
$270,000
Less fixed costs
50,000
50,000
40,000
140,000
Income (loss) from oper.
$ 70,000
$ (20,000)
$ 80,000
$130,000
Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G? A. $20,000 increaseB. $30,000 increaseC. $20,000 decreaseD. $30,000 decrease
45. The condensed income statement for a business for the past year is as follows:
Product
T
U
Sales
$600,000
$320,000
Less variable costs
540,000
220,000
Contribution margin
$ 60,000
$100,000
Less fixed costs
145,000
40,000
Income (loss) from operations
$ (85,000)
$ 60,000
Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product U. What is the amount of change in net income for the current year that will result from the discontinuance of Product T? A. $60,000 increaseB. $85,000 increaseC. $85,000 decreaseD. $60,000 decrease
46. A business is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $15 per unit. The unit cost for the business to make the part is $20, including fixed costs, and $12, not including fixed costs. If 30,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it? A. $150,000 cost increaseB. $ 90,000 cost decreaseC. $150,000 cost increaseD. $ 90,000 cost increase
47. A business is operating at 70% of capacity and is currently purchasing a part used in its manufacturing operations for $24 per unit. The unit cost for the business to make the part is $36, including fixed costs, and $28, not including fixed costs. If 15,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it? A. $60,000 cost decreaseB. $180,000 cost increaseC. $60,000 cost increaseD. $180,000 cost decrease
48. The amount of income that would result from an alternative use of cash is called: A. differential incomeB. sunk costC. differential revenueD. opportunity cost
49. Jones Co. can further process Product B to produce Product C. Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $60 per pound and would require an additional cost of $24 per pound to produce. What is the differential cost of producing Product C? A. $30 per poundB. $24 per poundC. $28 per poundD. $60 per pound
50. Neter Co. can further process Product J to produce Product D. Product J is currently selling for $21 per pound and costs $15.75 per pound to produce. Product D would sell for $35 per pound and would require an additional cost of $8.75 per pound to produce. What is the differential cost of producing Product D? A. $7 per poundB. $8.75 per poundC. $15 per poundD. $5.25 per pound
