ACCT 434 Final Exam Set 4 For more course tutorials visit www. uophelp. com
evant operating range. Explain whether the Red Car Division should a ccept the offer. Support your decision showing all calculations 4.( TCO 8) Sportswear Company manufactures socks. The Athletic Di vision sells its socks for $ 6 a pair to outsiders. Socks have manufactur ing costs of $ 2.50 each for variable and $ 1.50 for fixed. The division ' s total fixed manufacturing costs are $ 105,000 at the normal volume of 70,000 units. The European Division has offered to buy 15,000 socks at the full cos t of $ 4. The Athletic Division has excess capacity and the 15,000 unit s can be produced without interfering with the current outside sales of 70,000. The 85,000 volume is within the division ' s relevant operating range. Explain whether the Athletic Division should accept the offer. Suppo rt your decision showing all calculations.( Points: 25) 5.( TCO 11) For supply item LK, Boatman Company has been orderin g 125 units based on the recommendation of the salesperson who calls on the company monthly. The company has hired a new purchasing agent, who wants to start using the economic-orderquantity method and its supporting decision elements. She has gather ed the following information: Annual demand in units 250
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ACCT 434 Final Exam Set 4 For more course tutorials visit www. uophelp. com
FINAL EXAM – D 1.( TCO 1) Evaluating customer reaction of the trade-off of giving up some features of a product for a lower price would best fit which category of management decisions under activity-based management?( Points: 5)