13 . ( TCO 7 ) An understanding of lifecycle costs can lead to ( Points : 5 ) 14 . ( TCO 7 ) Each month , Haddon Company has $ 300,000 total manu facturingcosts ( 20 % fixed ) and $ 125,000 distribution and marketing c osts ( 75 % fixed ). Haddon ' s monthly sales are $ 600,000 . The markup percentage on full cost to arrive at the target ( existing ) se lling price is ( Points : 5 ) 15 . ( TCO 8 ) Transfer prices should be judged by whether they promot e ( Points : 5 ) 16 . ( TCO 8 ) Division A sells soybean paste internally to Division B , which inturn , produces soybean burgers that sell for $ 5 per pound . D ivision A incurs costs of $ 0.80 per pound while Division B incurs addi tional costs of $ 3 per pound . Which of the following formulas correct ly reflects the company ' s operating income per pound ? ( Points : 5 ) 17 . ( TCO 8 ) When companies do not want to use market prices or find it toocostly , they typically use ________ prices , even though subopti mal decisions may occur . ( Points : 5 ) 18 . ( TCO 9 ) To guide cost allocation decisions , the fairness or equity c riterion is ( Points : 5 ) 19 . ( TCO 9 ) The Hassan Corporation has an electric mixer division a nd an electric lamp division . Of a $ 20,000,000 bond issuance , the ele ctric mixer division used $ 14,000,000 and the electric lamp division u sed $ 6,000,000 for expansion . Interest costs on the bond totaled $ 1,5 00,000 for the year . Which corporate costs should be allocated to div isions ? ( Points : 5 ) 20 . ( TCO 10 ) A " whatif " technique that examines how a result will change ifthe original pre dicted data are not achieved or if an underlying assumption changes i s called ( Points : 5 ) 21 . ( TCO 10 ) The Zeron Corporation wants to purchase a new machi ne for its factory operations at a cost of $ 950,000 . The investment is expected to generate $ 400,000 in annual cash flows for a period of fo ur years . The required rate of return is 12 %. The old machine can be sold for $ 50,000 . The machine is expected to have zero value at the e nd of the four-year period .