Summary ACCT 212 Chapter 10 Reading Assignment Liberty University answers complete solutions (latest 2022/2023) When making additional business decisions, management should consider: True or false: when considering the elimination of segment, management should

ACCT 212 Chapter 10 Reading Assignment Liberty University answers complete solutions (latest 2022/2023) When making additional business decisions, management should consider: True or false: when considering the elimination of segment, management should look at more than the segment’s performance report. Many factors affect management’s decision making. Which of the following factors are considered qualititative factors? -_____- costs, also called differential costs, are the additional costs incurred if a company pursues a certain course of action. When making sell or process decisions, management should consider: A company purchased manufacturing equipment 5 years ago for $50,000….. The new equipment will cost $75,000… The vendor is willing to accept the old equipment with a trade-in allowance of $10,000. The company should: K When making scrap or rework decisions, management should consider: A(n) _____ cost is the potential benefit lost taking a specific action when two or more alternative choices are available. A company receives an order of 10,000 units of product. The potential customer is willing to pay $0.75 per unit. Current sales are $90,000 and…. If the company has the capacity to accept the order without affecting current sales, the company should: List the steps of the decision making process, with the first step on top. A company produces two products. Product A sells for $25… The company can sell all it can make of either product. Which statement is true? Product A should be produced because it will provide greater contribution margin per machine hour. A company produces two products. Product A sells for $25. The company can sell all it can make of of either product. Which statement is true...? $25, 15, 2 35, 20 , 2 40,000 Product B should be produced because it will create greater profits. When making decisions, manager should consider all relevant costs, which include: A(n) _____ _cost arises from a past decision, cannot be avoided or changed, and is irrelevant to future decisions. A company incurred $1,000 in costs to produce 500 units…. Reworking the defective units will prevent the company from producing an additional new 500 units. How should the company handle the defective units? Sell as is because incremental income will be $500 Relevant ______ refer to the additional or incremental revenues generated by selecting a particular course of action over another. Benefits The decision rule for segment elimination is to consider eliminating a segment if the segment revenues are less than the segment ______ expenses. Avoidable When demand is unlimited and products use different inputs, the company should produce the product with the: highest contribution margin per unit A student is deciding whether to take an additional class or work extra hours. Which amounts are relevant to this decision? Cost of textbook Tuition of the class Hourly wages Taking into consideration variable costs, fixed costs and a profit are all issues dealing with setting product price. A company receives an order of 10,000 units. The total incremental costs to fill this order if accepted, are $70000 $70,000 When making keep or replace equipment decisions, management should consider the: A manufacturing company currently produces 1,000 units of a product at a cost of $5,000. The units sell for 7000. The additional processing will cost $4,000. The company should: Sell as is because processing further will reduce income by $1,000 A company produces two products. Product A sells for $25. 40,000 machine hours are available. Which statement is true? The company should produce 8,000 units of Product A and 4,800 units of Product B. ___ costs, also called differential costs, are the additional costs incurred if a company pursues a certain course of action. Incremental When making additional business decisions, management should consider: (Check all that apply.) A company incurred $1,000 in costs to produce 500 units which sell for $1,500. Upon inspection, it was determined the units were defective and reworking the units would cost an additional $1.50 per unit. The defective units can be would as is for $1.00 each. Reworking the defective units will prevent the company from production an additional new 500 units. How should the company handle the defective units? Sell as is because incremental income will be $500 When making keep or replace equipment decisions, management should consider the: (Check all that apply.) A company currently makes a component used in production. The per unit costs incurred to make the component include: Direct materials: $5; Direct labor: $2; Overhead: $4; Total cost: $11. Twenty-five percent of the overhead costs are considered incremental. The company can purchase the component from another source for $10. The company should do which of the following? The company should make the components because incremental costs are $2 less than the purchase price. A company receives an order of 10,000 units of product. The standard cost of producing one unit includes: Direct materials: $4; Direct labor: $3; Fixed overhead: $@. The company has the capacity to accept the order without incurring any additional fixed overhead. The total incremental costs to fill this order, if accepted, are $70000 When making sell or process decisions, management should consider: (Check all that apply.) List the steps of the decision making process, with the first step on top. When demand is unlimited and products use different inputs, the company should produce the product with the: Relevant ___ refer to the additional or incremental revenues generated by selecting a particular course of action over another In a make or buy decision, management should consider: (Check all that apply.) When demand is limited and products are use different inputs, the company should produce the mix that will not exceed demand and maximize the production of the product with the: Highest contribution margin per input A(n) ___ cost is the potential benefit lost by taking a specific action when two or more alternative choices are available. When making scrap or rework decisions, management should consider: (Check all that apply.) A manufacturing company currently produces 1,000 units of a product at a cost of $5,000. The units sell for $7,000. Alternatively, the company can process further to produce a refined product that will sell for $10,000. The additional processing will cost $4,000. The company should: A(n) ___ cost arises from a past decision, cannot be avoided or changed, and is irrelevant to future decisions. A student is deciding whether to take an additional class or work extra houses. Which amounts are relevant to this decision? (Check all that apply.) A company produces two products. Product A sells for $25, has variable costs of $15, and requires 2 machine hours to produce. Product B sells for $35, has variable costs of $20, and requires 5 machine hours to product. 40,000 machine hours are available. The company can sell all it can make of either product. Which statement is true? The decision rule for segment elimination is to consider eliminating a segment if the segment revenues are less than the segment ___ expenses A company receives an order of 10,000 units of product. The potential customer is willing to pay $0.75 per unit. Current sales are $90,000 and current costs are $75,000 for 90,000 units. If the order is accepted, costs will increase to $82,000. If the company has the capacity to accept the order without affecting current sales, the company should: A company purchased manufacturing equipment 5 years ago for $50,000. Accumulated depreciation is currently $45,000 and the remaining useful life is 4 years. The equipment incurs annual operating costs of $30,000. The company is considering replacing the equipment. The new equipment will cost $75,000, having useful life of 3 years, and is more efficient and, therefore, only costs $10,000 to operate each year. The vendor is willing to accept the old equipment with trade-in allowance of $10,000. The company should: Keep the old equipment because the total net decrease in income will be $5,000 A(n) ___ expense is the amount that would continue if a segment is eliminated. Unavoidable When making decisions, managers should consider all relevant costs, which include: When determining a product price, all of the following should be taken into account: The total ___ method of setting prices includes the product’s total costs plus a desired profit. A(n) ___ expense is the amount a company would not incur if a segment is eliminated. Avoidable Many factors affect management’s decision making. Which of the following factors are considered qualitative factors? (Check all that apply.) A student purchased a used car for $5,000. Three months later, the student discovers the car needs major repairs which will cost $2,000. The student must decide whether to repair the car or purchase another car. Which statement is correct? The relevant costs are $2,000 Johnny Company has the following costs: Production costs per unit $20; Nonproduction costs per unit $5; fixed overhead $100,000; and fixed nonproduction costs $50,000. Compute Johnny Company’s selling price per unit with a 25% return on its assets of $500,000 on expected sales of 50,000 units. Taking into consideration variable costs, fixed costs and a profit are all issues dealing with setting product ___ A company has the following costs: Production costs per unit $20 and total fixed costs $50,000. Compute the markup percentage if they desire a 30% return on its assets of $800,000 on expected sales of 50,000 units. 22.9% A student is considering adding.. The relevant benefits related to this decision are: