Should the company produce the product internally

Assignment Help Accounting Basics
Reference no: EM13507458

Question Detail:

1)Under a relevant range of production, when total quantities sold increase, total fixed costs


increase


decrease


remain equal


there is no relationship

2)Conversion costs are


only direct material


only direct labor


only overhead


overhead and direct labor

3)XY Company sells its unique product at $30.00. Variable costs per unit are $20.00. Total fixed sales salaries per month $40,000.00. Other fixed costs per month $60,000.00. Assume that the company wants to change the sales salaries as follows: Total fixed sales salaries per month 25,000. Sales commission of 10% of sales.?Find at what sale-level is the company indifferent between the two alternatives


$5,000


5,000 units


10,000


7,500 units

4) AJ Company makes three products.

?

?

?

Current selling price per unit, variable cost per unit, and machine hours required are as follows:

?

?

Products

?

?

X

Y

Z

Current selling price per unit

$20

$30

$20

Variable cost per unit

10

18

12

Machine hours required for each unit

2

3

4

The company has a maximum of 1000 machine hours available per month.

Assume the company produces all products; find the total contribution margin per hour.


$13.50


$12


$9


$4

5) TC Company makes several printing works using two machines (X and Y).

Data on the two machines for June 2010 are as follows:

X

Y

Direct material

10

15

Time required for each unit (TR)

2

3

Expected volume during the month (EV)

2,000

500

Expected labor cost per hour

50

Budgeted overhead costs

660,000

Determine

The overhead rate per labor hour


FOAR = $120.00 per hour worked


FOAR = 120.00 per dollar


FOAR = $60.00 per hour worked


FOAR = $120.00 per overhead costs

6) Assume the cost structure is as follows: TC = 25,000 + 5q, where TC = total costs, q = quantities sold. Under relevant range of sales, selling price per unit is $8.00. Total fixed costs are

$100,000

$50,000

$25,000

More information is needed

7) The income statements of Tahany Company for June and July 2005 are as follows:

June

July

Sales

610

650

Cost of goods sold

420

460

Gross margin

190

190

Selling and administrative expenses

185

195

Income before tax

5

-5

Using High Low Method, the variable component of cost of goods sold is


1.00


.25


1.25


0

8) Non value added activities are


Direct material (only)


Direct labor (only)


Overhead (only)


Not essential costs to make/manufacture a product

9) Tany Corporation is a small table manufacturing company operating in the north of Puerto Rico.

Managers estimate the following costs per unit (one table)

Direct material (DM)

$6.00

Direct labor (DL)

$4.00

Variable manufacturing overhead (VMO)

$3.00

Variable administrative expenses (VAE)

$1.00

The estimated contribution margin is

30%

Monthly fixed costs are

Manufacturing

$10,000.00

Administrative

$5,000.00


2,000


2,200


2,500


2,750

10) Tany Corporation is a small table manufacturing company operating in the north of Puerto Rico.

Managers estimate the following costs per unit (one table)

Direct material (DM)

$6.00

Direct labor (DL)

$4.00

Variable manufacturing overhead (VMO)

$3.00

Variable administrative expenses (VAE)

$1.00

The estimated contribution margin is

30%

Monthly fixed costs are

Manufacturing

$10,000.00

Administrative

$5,000.00


Total unit sold during last month is 2525, what is the total operating income.


between $100 and $120


between $120 and $140


between $140 and $160


between $160 and $180

11) BC Company estimates the following data for the coming month: total variable costs $60,000.00, income tax rate 30%, contribution margin percentage 60%. Find the estimated total sales for the coming month.


$100,000


$60,000 / 40%


$60,000 / 60%


$60,000 X 60%

12) If a company raises its required net income


the tax rate will decrease


break even point is negative


required contribution margin increases


required contribution margin decreases



13)If a company raises its required operating profit


break even point is negative


break even point is zero


required contribution margin increases


required contribution margin decreases

14) Copy of

XYZ has three products X, Y and Z. The following information pertains to these products X, Y, and Z. Contribution margin percentages are 40%, 50%, and 40% respectively. Sales mix percentages are 20%, 30%, and 50% respectively. Monthly fixed costs are estimated to be $100.00. The weighted average contribution margin percentage is


43%


40%


30%


0

15) Which of the following examples is a short term decision?


Make or buy decision


Purchase of land


Issuing bonds


Joint venture


Purchase of building

16) Sales (in units)

60,000

Selling price per unit

25

Manufacturing costs per unit:

Materials

5

Direct labor

4

Overhead

Variable

4

Fixed

6

Total

19

Gross margin

6

Selling and admin. Expenses per unit

2

Operating income

4

A company in a foreign market offer to buy and the offer specifies the following data

units to be sold

10000

price per unit

20

If the Company accepts the special offer, the incremental profit would be


$70,000.00


($70,000.00)


$10,000.00


($10,000.00)

17) Total Costs

Unit Cost

Direct materials

20,000

2.00

Direct labor

25,000

2.50

Variable overhead

15,000

1.50

Fixed overhead (non-avoidable)

24000

2.40

Fixed overhead (avoidable)

26,000

2.60

Purchase cost

85,999

Should the company produce the product internally?


Yes


No


Indifferent to to make or to buy


Yes if the market price per unit covers the fixed cost per unit.

18) Sales (in units)

60,000

Selling price per unit

25

Manufacturing costs per unit:

Materials

5

Direct labor

4

Overhead

Variable

4

Fixed

6

Total

19

Gross margin

6

Selling and admin. Expenses per unit (fixed)

2

Operating income

4

A company in a foreign market offer to buy and the offer specifies the following data

units to be sold

10,000

price per unit

13.1

Should the company sell this special order?


Yes, accept


No, reject


Indifferent to reject or not


Always reject

Which of the following costs should be considered in short term decisions?

Reference no: EM13507458

Questions Cloud

Determine the temperature coefficient of resistivity : A wire 3.00 m long and 0.450 mm2 in cross-sectional area has a resistance of 41 at 20°C. what is the temperature coefficient of resistivity
Determine how far is it from the basket : A balloon carrying a basket is descending at a constant velocity of 20.0 m/s. how far is it from the basket
Find the center-of-mass of the rod : The density of a 3.0-m long rod can be described by the linear density function ?(x) = 135 g/m + 13.6x g/m2. find the center-of-mass of the rod
How they should finance the wedding : How they should finance the wedding and if tax implications will be a factor - this is research paper, memo, client letter and include APA as well.
Should the company produce the product internally : BC Company estimates the following data for the coming month: total variable costs $60,000.00, income tax rate 30%, contribution margin percentage 60%. Find the estimated total sales for the coming month.
Impact of the cash flow hedges : What types of derivative transactions does Xerox engage in and what types of commodities does Xerox hedge? How do derivative transactions align with Xerox's overall business strategy?
Define the net method of recording invoices : During the month of September, Norris Industries issued a check in the amount of $859 to a supplier on account. The check cleared the bank during September.
Add any additional ledger accounts required to complete : You have a new client who has incomplete financial records. You find that he has a motor vehicle for use in the business purchased in an earlier year.
Recognition of the important facts and issues : For tax purposes, it uses the accrual method and would prefer to defer the income from the ticket sales until it performs the concerts. This is the first time that it has sold tickets one or two years in advance. Michael Stipe has asked your advic..

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Tessmer manufacturing company produces inventory in a

tessmer manufacturing company produces inventory in a highly automated assembly plant in olathe ks. the automated

  What methods of accounting are available to a small

middot what are the alternative tax years available to a corporation? what factors should be considered in

  Compute the amount of phantom profit

In its first month of operation, Moraine Company purchased 100 units of inventory for $18, then 200 units for $21, and finally 150 units for $24. At the end of the month, 180 units remained. Compute the amount of phantom profit that would result i..

  Barrington bears bb has developed the following sales

barrington bears bb has developed the following sales forecasts for the next few months january 500 february 600 march

  What is a letter of credit

What are 4 examples of international Risks and Benefits.

  Depreciation deduction for the computer system

Compute the depreciation deduction for the computer system in 2006 and the cost recovery recapture. Assume that in 2004, Elaine had instead expensed under Section 179 the cost of the computer system. Compute the cost recovery recapture in 2006.

  Problem related to fixed overhead

The manufacturing costs for 40,000 units are: direct materials $900,000; direct labor $450,000; variable overhead $900,000; and fixed overhead $750,000. All costs except $500,000 in fixed overhead will be avoided if the parts are purchased.

  Identify features common to gift tax formula and estate tax

Identify the features common to the gift tax formula and the estate tax formula. What is the lifetime gift tax exemption in tax year 2012? What is that exemption amount in 2013?

  A method that estimates cost behavior by connecting costs

a method that estimates cost behavior by connecting the costs linked to the highest and lowest volume levels on a

  Report of client-s request by summarizing research

Write a 1,050- to 1,400-word paper that addresses your client's request by summarizing research from the FASB Accounting Standards Codification website and other sources.

  What would be the minimum amount for which the noncash

the following account balances were available for the perry quincy and renquist partnership just before it entered

  How much will patti have in the account in three years

How much will Patti have in the account in three years?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd