Question :
51. The amount of income that would result from an alternative : 1251736
51. The amount of income that would result from an alternative use of cash is called:
A. differential income
B. sunk cost
C. differential revenue
D. opportunity cost
52. Pheasant 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 pound
B. $24 per pound
C. $28 per pound
D. $60 per pound
53. Partridge 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 $37 per pound and would require an additional cost of $9.25 per pound to produce.
What is the differential cost of producing Product D?
A. $6.50 per pound
B. $9.25 per pound
C. $15 per pound
D. $5.25 per pound
54. Partridge 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 $37 per pound and would require an additional cost of $9.25 per pound to produce.
What is the differential revenue of producing Product D?
A. $6.75 per pound
B. $9.25 per pound
C. $16 per pound
D. $5.25 per pound
55. Quail Co. can further process Product B to produce Product C. Product B is currently selling for $60 per pound and costs $42 per pound to produce. Product C would sell for $82 per pound and would require an additional cost of $13 per pound to produce. What is the differential revenue of producing and selling Product C?
A. $22 per pound
B. $42 per pound
C. $45 per pound
D. $18 per pound
56. Raven Company is considering replacing equipment which originally cost $500,000 and which has $460,000 accumulated depreciation to date. A new machine will cost $790,000. What is the sunk cost in this situation?
A. $330,000
B. $500,000
C. $40,000
D. $290,000
57. Raptor Company is considering replacing equipment which originally cost $500,000 and which has $460,000 accumulated depreciation to date. A new machine will cost $790,000 and the old equipment can be sold for $8,000. What is the sunk cost in this situation?
A. $53,000
B. $40,000
C. $37,000
D. $290,000
58. A business is considering a cash outlay of $200,000 for the purchase of land, which it could lease for $35,000 per year. If alternative investments are available which yield an 18% return, the opportunity cost of the purchase of the land is:
A. $35,000
B. $36,000
C. $ 1,000
D. $37,000
59. A business is considering a cash outlay of $250,000 for the purchase of land, which it could lease for $36,000 per year. If alternative investments are available which yield an 18% return, the opportunity cost of the purchase of the land is:
A. $45,000
B. $36,000
C. $ 9,000
D. $54,000
60. A business is considering a cash outlay of $500,000 for the purchase of land, which it could lease for $40,000 per year. If alternative investments are available which yield a 21% return, the opportunity cost of the purchase of the land is:
A. $105,000
B. $ 40,000
C. $ 65,000
D. $ 8,400
