108.Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company’s segments.
PlatformShoesAthletic ShoesBoots
Sales $120,000 $420,000 $360,000
Variable costs 64,000 220,000 140,000
Contribution margin 56,000 200,000 220,000
Direct fixed costs 45,000 70,000 90,000
Allocated fixed costs 20,000 70,000 60,000
Net income ($9,000) $60,000 $70,000
If platform shoes are dropped, what effect will occur to Diva Footwear’s net income?
A.Increase by $9,000
B.Decrease by $56,000
C.Decrease by $11,000
D.Increase by $56,000
109.Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company’s segments.
PlatformShoesAthletic ShoesBoots
Sales $120,000 $420,000 $360,000
Variable costs 64,000 220,000 140,000
Contribution margin 56,000 200,000 220,000
Direct fixed costs 45,000 70,000 90,000
Allocated fixed costs 20,000 70,000 60,000
Net income ($9,000) $60,000 $70,000
If platform shoes are dropped, sales of athletic shoes are expected to drop by 10%. What impact will occur to Diva Footwear’s net income?
A.Income will decrease by $11,000.
B.Income will decrease by $31,000.
C.Income will decrease by $53,000.
D.Income will increase by $9,000.
110.The following information is available for Diva Footwear’s segments:
PlatformShoesAthletic ShoesBoots
Sales $120,000 $420,000 $360,000
Variable costs 64,000 220,000 140,000
Contribution margin 56,000 200,000 220,000
Direct fixed costs 45,000 70,000 90,000
Allocated fixed costs 20,000 70,000 60,000
Net income ($9,000) $60,000 $70,000
Diva Footwear normally sells boots for $90 per pair. An exporter has approached Diva about buying 1,000 pairs of boots for a one-time export deal for $81 per pair. Diva can avoid $3.00 per pair of the normal variable cost on this sale, but Diva must pay a fixed cost of $4,000 to have the boots shipped. Diva has the capacity to produce this order, and no regular sales will be affected. What affect will occur on Diva’s profits if the order is accepted?
A.Profits will increase by $42,000.
B.Profits will increase by $49,000.
C.Profits will increase by $45,000.
D.More information is needed to answer.
111.Hurley Processors processes clay into two joint products—molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the physical quantities method is used to allocate the joint costs, how much will be allocated to each batch of modeling foam?
A.$7.00
B.$8.75
C.$28.00
D.$40.00
112.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the physicalquantities method is used to allocate the joint costs, how much will be allocated to each batch of craft blocks?
A.$1.20
B.$28.00
C.$8.75
D.$120.00
113.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the relative sales value method is used to allocate the joint costs, what is the total amount that will be allocated to each batch?
A.$55
B.$35
C.$160
D.None of these answer choices are correct.
114.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the relative sales value method is used to allocate the joint costs, how much will be allocated to each batch of modeling foam?
A.$7.00
B.$8.75
C.$28.00
D.$15.00
115.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35.If the relative sales value method is used to allocate the joint costs, how much will be allocated to craft blocks?
A.$8.75
B.$26.25
C.$28.00
D.$15.00
116.Soren Company makes two products from a joint input that have the following information:
Sales ValueTotal AdditionalSales Value
UnitsPer UnitProcessingPer Unit After
ProducedAt Split-OffCostsAdditional Processing
Product A 40,000 $10 $400,000 $15
Product B 150,000 4 300,000 7
The joint cost incurred to produce the two products to the split-off point is $600,000. How much joint cost should be allocated to Product Ausing the relative sales value at split-off as the allocation method?
A.$600,000
B.$126,316
C.$400,000
D.$240,000
117.Soren Company makes two products from a joint input that have the following information:
Sales ValueTotal AdditionalSales Value
UnitsPer UnitProcessingPer Unit After
ProducedAt Split-OffCostsAdditional Processing
Product A 40,000 $10 $400,000 $15
Product B 150,000 4 300,000 7
The joint cost incurred to produce the two products to the split-off point is $600,000. Which product(s) should be processed further?
A.A
B.B
C.Neither A nor B
D.Both A and B
