Question : 41. Under the total cost concept, manufacturing cost plus desired profit : 1251735

 

 

41. Under the total cost concept, manufacturing cost plus desired profit is included in the total cost per unit.  

42. Under the variable cost concept, only variable costs are included in the cost amount per unit to which the markup is added.  

43. The desired selling price for a product will be the same under both variable and total cost.  

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

FGHTotal

Sales$300,000$210,000$340,000$850,000

Less variable costs180,000190,000220,000590,000

Contribution margin$120,000$  20,000$120,000$260,000

Less fixed costs50,00050,00040,000140,000

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

TU

Sales$660,000$320,000

Less variable costs540,000220,000

Contribution margin$  120,000$100,000

Less fixed costs145,00040,000

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

 

 

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