Question :
41. Activity-based costing provides more accurate and useful cost data.
42. Activity-based costing : 1246960
41. Activity-based costing provides more accurate and useful cost data.
42. Activity-based costing should only be implemented if the benefit of the Activity-based costing system is less than the cost to implement the system.
43. Activity-based costing is determined by charging products for only the services (activities) they used during production.
44. 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
45. 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
46. A cost that will not be affected by later decisions is termed a(n): A. historical costB. differential costC. sunk costD. replacement cost
47. The condensed income statement for a business for the past year is presented as follows:
Product
F
G
H
Total
Sales
$300,000
$210,000
$340,000
$850,000
Less variable costs
180,000
190,000
220,000
590,000
Contribution margin
$120,000
$ 20,000
$120,000
$260,000
Less fixed costs
50,000
50,000
40,000
140,000
Income (loss) from oper.
$ 70,000
$ (30,000)
$ 80,000
$120,000
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
48. The condensed income statement for a business for the past year is as follows:
Product
T
U
Sales
$660,000
$320,000
Less variable costs
540,000
220,000
Contribution margin
$ 120,000
$100,000
Less fixed costs
145,000
40,000
Income (loss) from operations
$ (25,000)
$ 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. $120,000 increaseB. $250,000 increaseC. $25,000 decreaseD. $120,000 decrease
49. 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
50. 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
