ACCT 301 help A Guide to career/Snaptutorial ACCT 301 help A Guide to career/Snaptutorial | Page 2

5. (TCO 9) It costs Lannon Fields $14 of variable costs and $6 of
allocated fixed costs to produce an industrial trash can that sells for
$30. A buyer in Mexico offers to purchase 2,000 units at $18 each.
Lannon has excess capacity and can handle the additional production.
What effect will acceptance of the offer have on net income?
6. (TCO 9) Wishnell Toys can make 1,000 toy robots with the
following costs:
Direct Materials $70,000
Direct Labor 26,000
Variable Overhead 15,000
Fixed Overhead 15,000
The company can purchase the 1,000 robots externally for $120,000.
The avoidable fixed costs are $5,000 if the units are purchased
externally. What is the cost savings if the company makes the robots?
7. (TCO 9) All of the following are relevant to the sell or process-
further decision, except for __________
8. (TCO 8) Most of the capital budgeting methods use __________
9. (TCO 8) The capital budgeting decision depends in part on the
__________
10. (TCO 8) The cash-payback technique __________
11. (TCO 8) All of the following statements about intangible benefits
in capital budgeting are correct, except that they __________
12. (TCO 8) The profitability index __________.
13. (TCO 8) Post audits of capital projects __________