### Amount of sunk costs in this problem

Assignment Help Cost Accounting
##### Reference no: EM139736

Q1. RNO Company's market for the Model 55 has changed significantly, and RNO has had to drop the price per unit from \$265 to \$125.  There are some units in the work in process inventory that have costs of \$150 per unit associated with them.  RNO could sell these units in their current state for \$100 each.  It will cost RNO \$10 per unit to complete these units so that they can be sold for \$125 each.

Which of the following is the amount of sunk costs in this problem?

A)   \$150 per unit

B)   \$125 per unit

C)   \$10 per unit

D)   \$265 per unit

Q2. A new employee looks at the analysis and exclaims, "We'll lose money with either of these alternatives! Let's just throw these units in the trash!" Suppose the alternative to trashing is choosing the more profitable of the two alternatives (that the new employee looked at and did not like). What effect will the trashing option (that the new employee wants) have on net income?

A)  Net income will increase by \$35 per unit for each unit discarded.

B)   Net income will decrease by \$115 per unit for each unit discarded.

C)   It will have no effect on net income.

D)  Net income will decrease by \$265 per unit for each unit discarded.

Q3. When the incremental revenues and expenses are analyzed, the company is better off by

A)  \$10 per unit if the sell the units in their current state.

B)  \$25 per unit if they sell the units in their current state.

C)  \$15 per unit if they complete the units.

D)  \$125 per unit if they complete the units.

### Write a Review

#### Prepare a complete statement of cash flows

Prepare a complete statement of cash flows

#### Evaluate the amount of cash expected to be collected in july

Evaluate the amount of cash expected to be collected in July

#### Prepare a compelling argument to convince companys partner

Prepare a compelling argument to convince a company's partners

#### The estimates of the variable and fixed components

What is the most likely effect on the labor variances in the first month of this strike. the estimates of the variable and fixed components of repair cost would be

#### Evaluate the amounts for - cash received from customers

Had cash flow statement been prepared using the direct method, Evaluate the amounts for? Cash received from Customers.

#### Evaluate the machine capability

Evaluate the machine capability

#### Which cost is relevant present cost or replacement cost

Which cost is relevant present cost or replacement cost

#### Evaluate supplementary net income

Determine the 2004 ROI for each division and Rashid, manager of Division A, is supposing a proposal to invest 250 million rials for modern equipment.

#### Evaluate chis recognized gain or loss on the exchange

Evaluate Chis recognized gain or loss on the exchange.

#### Prepare the journal entries

Prepare the journal entries to record the bond issue and interest expense.

#### Evaluate the maximum profits

Evaluate the maximum profits that Greentown can earn and the customer mix and quantity by which that profit will be achieved.

#### Prepare the entry doeby will record to reflect acquisition

Prepare the entry Doeby will record to reflect this additional acquisition.