Brief Exercise 20-8
Lisah, Inc., manufactures golf clubs in three models. For the year, the
Big Bart line has a net loss of $5,500 from sales $200,000, variable
costs $176,000, and fixed costs $29,500. If the Big Bart line is
eliminated, $20,100 of fixed costs will remain. Prepare an analysis
showing whether the Big Bart line should be eliminated
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ACC 561 Week 6 Wileyplus Practice Quiz
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1. A major accounting contribution to the managerial decision-making
process in evaluating possible courses of action is to
2. In incremental analysis,
3. Incremental analysis is most useful
4. It costs Ross Co. $24 of variable and $10 of fixed costs to produce
one bathroom scale which normally sells for $70. A foreign
wholesaler offers to purchase 2,000 scales at $30 each. Ross would
incur special shipping costs of $2 per scale if the order were accepted.
Ross has sufficient unused capacity to produce the 2,000 scales. If the
special order is accepted, what will be the effect on net income?
5. Carter, Inc. can make 100 units of a necessary component part with
the following costs:
Direct Materials $120,000
Direct Labor 20,000
Variable Overhead 60,000
Fixed Overhead 40,000
If Carter purchases the component externally, $30,000 of the fixed
costs can be avoided. At what external price for the 100 units is the
company indifferent between making or buying?
6. Mink Manufacturing is unsure of whether to sell its product
assembled or unassembled. The unit