81.Which of the following is true of cloud computing? A.It allows companies to lease software but not hardware. B.Employees are not aware of the location of the databases. C.Company data that is stored on the public cloud can be is accessed by the public. D.It can be accessed only through computers; other gadgets cannot be used. E.It requires an […]
17) Which of the following factors would be considered irrelevant when evaluating equipment replacement decisions? A) the book value of the old machine B) manufacturing costs C) overhead costs D) product production costs E) useful life of new equipment 18) Ignoring tax consequences, how should the gain or loss on disposal of an old machine be treated in an equipment replacement decision? A) […]
81) LaserLife Printer Cartridge Company is a decentralized organization with several autonomous divisions. The division managers are evaluated, in part, on the basis of the change in their return on invested assets. Operating results for the Packer Division for 20X5 are budgeted as follows: Sales $5,000,000 Less variable costs 2,500,000 Contribution margin 2,500,000 Less fixed expenses 1,800,000 Net operating income $ […]
51) ________ is the amount of time from when a customer places an order for a product or requests a service to when the product or service is delivered to the customer. 51) ______ A) Quality customer time B) A bottleneck C) Customer response time D) Manufacturing lead time E) A time driver 52) On-time performance is 52) ______ A) when the product is […]
11. Price Corporation reported a $1,800 balance in accounts receivable on January 1, 2012. During the year, $12,400 of sales on account were made. During the year, Price wrote off accounts receivable of $850 as uncollectible. If the ending balance of accounts receivable is $1,000, what is the amount of cash received from customers? A. $10,600 B. $10,750 C. $12,350 D. $14,200 12. Bridges Company pays cash for all inventory […]
75. California Adventures issues 5,000 shares of 8%, $100 par value preferred stock at the beginning of 2014. All remaining shares are common stock. The company was not able to pay dividends in 2014, but plans to pay dividends of $100,000 in 2015. Assuming the preferred stock is cumulative, how much of the $100,000 dividend will be paid to preferred stockholders and how […]
19) An example of a bundled product is when a computer software manufacturer charges a single price for the spreadsheet, word processing, and presentation software. on the same CD. 20) Revenue allocation is required to determine the profitability of individual items within a bundled product. 21) The stand-alone method may use selling price or unit costs to allocate revenues. 22) Revenue allocation […]
31. Pager Corporation acquires 30% of the outstanding voting common shares of the Intercomm Corporation for $600,000. Pager Corporation acquires the investment in Intercomm Corporation by buying previously issued shares of Intercomm Corporation from other investors. Suppose that Intercomm Corporation reports earnings of $100,000 and pays dividends of $40,000, during the next accounting period. As a result, Pager Corporation’s entries are: A. Equity in […]
Multiple Choice Questions 81.Accounting is an information and measurement system that does all of the following except: A.Identifies business activities. B.Records business activities. C.Communicates business activities. D.Eliminates the need for interpreting financial data. E.Helps people make better decisions. 82.Technology: A.Has replaced accounting. B.Has not improved the clerical accuracy of accounting. C.Reduces the time, […]
Essay Questions 81. Accounting terminology Listed below are eight technical accounting terms introduced or emphasized in this chapter: Each of the following statements may (or may not) describe one of these technical terms. In the space provided beside each statement, indicate the accounting term described, or answer “None” if the statement does not correctly describe any of the terms. ______ (a) […]
Objective 11.8
1) Top management faces a persistent challenge to make sure that the performance evaluation model of lower level managers is ________.
A) focused on short-term performance
B) based solely on quantitative factors
C) consistent with the decision model
D) based solely on qualitative factors
2) Performance evaluation focuses on responsibility centers for a specific period, not on projects or individual items of equipment over their useful lives.
3) How can conflicts arise between the decision model and the performance evaluation model used to evaluate managers? Provide an example of this type of conflict.
Objective 11.A
1) Linear programming is a tool that maximizes total contribution margin of a mix of products with multiple constraints.
2) Which of the following is an assumption of linear programming?
A) Average variable costs remain constant throughout the year.
B) Opportunity costs are irrelevant in decision making.
C) Few sunk costs are relevant in decision making.
D) All costs are either variable or fixed for a single cost driver.
3) In linear programming, the goals of management are expressed in ________.
A) an objective function
B) constraints
C) operating policies
D) business functions
4) A mathematical inequality or equality that must be appeased is known as a(n) ________.
A) objective function
B) constraint
C) operating policy
D) business function
5) Computer Products produces two keyboards, Regular and Special. Regular keyboards have a unit contribution margin of $128, and Special keyboards have a unit contribution margin of $720. The demand for Regulars exceeds Computer Product's production capacity, which is limited by available machine-hours and direct manufacturing labor-hours. The maximum demand for Special keyboards is 80 per month. Management desires a product mix that will maximize the contribution toward fixed costs and profits.
Direct manufacturing labor is limited to 1,600 hours a month and machine-hours are limited to 1,200 a month. The Regular keyboards require 20 hours of labor and 8 machine-hours. Special keyboards require 34 labor-hours and 20 machine-hours.
Let R represent Regular keyboards and S represent Special keyboards. The correct set of equations for the keyboard production process is ________.
A) Maximize:$128R + $720S
Constraints:
Labor-hours:20R + 34S ≤ 1,600
Machine-hours:8R + 20S ≤ 1,200
Special:S ≤ 80
S ≥ 0
Regular:R ≥ 0
B) Maximize:$128R + $720S
Constraints:
Labor-hours:20R + 34S ≥ 1,600
Machine-hours:8R + 20S ≥≤ 1,200
Special:S ≥ 80
S ≥ 0
Regular:R ≥ 0
C) Maximize:$720S + $128R
Constraints:
Labor-hours:20R + 8S ≤ 1,600
Machine-hours:34R + 20S ≤ 1,200
Special:S ≤ 80
S ≥ 0
Regular:R ≥ 0
D) Maximize:$128R + $720S
Constraints:
Labor-hours:20R + 34S ≤ 1,600
Machine-hours:8R + 20S ≤ 1,200
Special:S ≥ 80
S ≤ 0
Regular:R ≤ 0
6) In linear programming, a constraint is a mathematical inequality or equality that must be satisfied by the variables in a mathematical model.
7) Local Steel Construction Company produces two products, steel and wood beams. Steel beams have a unit contribution margin of $200, and wood beams have a unit contribution margin of $150. The demand for steel beams exceeds Local Steel Construction Company's production capacity, which is limited by available direct labor and machine-hours. The maximum demand for wood beams is 90 per week. Management desires that the product mix should maximize the weekly contribution toward fixed costs and profits.
Direct manufacturing labor is limited to 3,000 hours a week and 1,000 hours is all that the company's outdated machines can run a week. The steel beams require 120 hours of labor and 60 machine-hours. Wood beams require 150 labor hours and 120 machine-hours.
Required:
Formulate the objective function and constraints necessary to determine the optimal product mix.
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