• Question 11 A professional organization is planning to conduct a series of one-day continuing education programs in various cities. The projected costs related to these programs are
• Question 12 A company wants to determine its marketing costs for budgeting purposes. Activity measures and costs incurred for four months of the current year are presented in the table below. Advertising is considered to be a discretionary cost. Salespersons are paid monthly salaries plus commissions. The sales force was increased from 20 to 21 individuals during the month of May.
• Question 13 Ajax Division of Carlyle Corporation produces electric motors, 20 % of which are sold to Bradley Division of Carlyle and the remainder to outside customers. Carlyle treats its divisions as profit centers and allows division managers to choose their sources of sale and supply. Corporate policy requires that all interdivisional sales and purchases be recorded at variable cost as a transfer price. Ajax Division’ s estimated sales and standard cost data for the year ending December 31, 2012, based on the full capacity of 100,000 units, are as follows:
• Question 14 Light Company has 2,000 obsolete light fixtures that are carried in inventory at a manufacturing cost of $ 30,000. If the fixtures are reworked for $ 10,000, they could be sold for $ 18,000. Alternately, the light fixtures could be sold for $ 3,000 to a jobber located in a distant city. In a decision model analyzing
these alternatives, the opportunity cost would be
• Question 15 Multiple regression differs from simple regression in that it
• Question 16 Gata Co. plans to discontinue a department with $ 48,000 contribution to overhead, and allocated overhead of $ 96,000, of which $ 42,000 cannot be eliminated. What would be the effect of this discontinuance on Gata’ s pretax profit?
• Question 17 A professional organization is planning to conduct a series of one-day continuing education programs in various cities. The projected costs related to these programs are
• Question 18 Rodder, Inc. manufactures a component in a router assembly. The selling price and unit cost data for the component are as follows:
• Question 19 Lincoln Company, a glove manufacturer, has enough idle capacity available to accept a special order of 20,000 pairs of gloves at $ 12.00 a pair. The normal selling price is $ 20.00 a pair. Variable manufacturing costs are $ 9.00 a pair, and fixed manufacturing costs are $ 3.00 a pair. Lincoln will not incur any selling expenses as a result of the special order. What would be the effect on operating income if the special order could be accepted without affecting normal sales?
• Question 20 JacKue Co. plans to produce 200,000 pairs of roller skates during January of next year. Planned production for February is 250,000 pairs. Sales are forecasted at 180,000 pairs for January and 240,000 pairs for February. Each pair of roller skates has eight wheels. JacKue’ s policy is to maintain 10 % of the next month’ s production in inventory at the end of a month. How many wheels should JacKue purchase during January?
• Question 21 Which of the following is a characteristic of a flexible budget?
• Question 22 All else being equal, the breakeven point in units will be higher if
• Question 23 The ratio of fixed costs to the contribution margin is
• Question 24 Oslo Co.’ s industrial photo-finishing division, Rho, incurred the following costs and expenses in 2012: