ACC 3300 Exam 2 - Accounting course
COMPLETE EXAM LATEST VERSION 2026-2027
QUESTIONS AND 100% Verified ANSWERS
Which of the following statements best describes the impact that changing exchange
rates have on a manager's performance evaluation in multinational companies? -
answer>>>If currency management is decentralized within an organization, individual
managers should be held accountable for the impact of changing exchange rates on
performance measures.
The socket division of Lehigh Lighting manufactures bulb sockets and sells them to
customers for $6.20 per unit. Each bulb socket has a variable cost of $3.00 per unit, and a
fixed cost of $0.85. Lehigh's management would like the socket division to transfer
25,000 sockets to another division within the company. If the socket division sold sockets
internally, it would avoid $0.60 of variable packaging costs per unit. Assuming the socket
division has enough extra capacity to manufacture the 25,000 sockets, what is its
minimum transfer price per unit? - answer>>>$2.40
The alternator division of Tiny Autos manufactures alternators and sells them to
customers for $120 each. The division is currently operating at full capacity, and its cost
breakdown for each alternator is as follows:
Direct materials cost$33Variable labor cost$11Variable overhead cost$10Fixed overhead
cost$9
Tiny's upper management wants the alternator division to sell 10,000 alternators to
another division within the company. The alternator division could avoid variable
overhead costs of $3 per unit by selling internally. If the two divisions ultimately agree to
a transfer price of $120 per unit, the alternator division will make: - answer>>>$30,000
more than it would have made if it had agreed to its minimum acceptable transfer price.
,Robert Scott Lumber Company has a cutting division that cuts red oak trees into boards
and a finishing division that makes red oak boards into custom woodwork used in
renovation of historic buildings. Costs per board foot for the cutting division are:
Direct material$3.00Direct labor$1.25Variable overhead$0.75Fixed overhead$0.20
The cutting division sells boards to external customers for $6.50 per board foot, but has
capacity to sell to the finishing division as well. The finishing department has been
purchasing lumber from an outside vendor for $6.50 per board foot. If the cutting
department starts transferring lumber to the finishing department, calculate the
minimum transfer price. - answer>>>$5.00
Vroom Motorcycle Company, headquartered in the United States, presently
manufactures their motorcycles in the country of Utopia due to their lower costs of
production, low tariffs, favorable exchange rates, and access to lower cost raw materials,
which are 50% lower than that of the U.S.. However, in recent years, Utopia has seen a
boom in companies relocating their production to Utopia. Due to this factor, the
exchange rates have become unfavorable to Vroom, and as a result the cost of raw
materials has increased over 25% in the past year. Which of the following actions would
you recommend Vroom's management take? - answer>>>Continue operations as they
are, however, closely monitor the current economic situation in Utopia.
An appropriate transfer price between two divisions of Vroom Motorcycle Company can
be determined from the following data:
Fabricating division: Market price of subassembly$75 Variable cost of subassembly$30
Excess capacity (in units)50Assembling Division: Number of units needed45
What is the natural bargaining range for the two divisions? - answer>>>Any amount
between $30 and $75.
,Which of the following is a disadvantage of using the full-cost model for determining
transfer prices? - answer>>>There is no motivation for the internal supplier to produce
the good or service in an efficient way.
The alternator division of Moto Motorcycles manufactures alternators and sells them to
customers for $80 each. The cost breakdown for each alternator is as follows:
Direct materials cost$23Variable labor cost$9Variable overhead cost$7Fixed overhead
cost$5
Moto's upper management wants the alternator division to sell 10,000 alternators to
another division within the company. If the alternator division sold internally, it could
avoid variable overhead costs of $2 per unit. Assuming the alternator division is
operating at full capacity, what would be the minimum transfer price per alternator? -
answer>>>$78
The media division of Dakota Biological Supply Company produces media for growing
fungi, which can either be sold to the fungal division for growing cultures or sold to
outside entities. The cost sheet for pre-poured plates of potato dextrose agar, which are
sold in 10 plate units, is as follows:
Direct material$ 3.75Direct labor$ 6.50Variable overhead$ 1.25Fixed overhead$
3.50Selling price per 10 plates$25.00
The fungal division needs 10,000 plates of potato dextrose agar annually. Currently, the
fungal division purchases them from Arizona Lab Supplies for $25.00 for a unit of 10
plates because the media division has no excess capacity. However, recently the media
division has lost a major customer and now has the capacity to provide the plates. What
would be the minimum transfer price per sleeve of 10 plates? - answer>>>$11.50 per
unit
, Which of the following is an advantage of using the full-cost model for determining
transfer prices? - answer>>>The selling division will not lose money on a transfer
occurring at full cost.
The fabric division of Sweet Petunia's Baby Gear produces fabric designs to be used by
the furniture division. The fabric division sells fabric to outside customers for $800 per
bolt. Variable product costs total $575 per bolt, while variable selling and administrative
costs are $75 per bolt. What is the transfer price if a market-based transfer policy is in
effect? - answer>>>$800 per bolt
The wheel division of Liberty Bicycles manufactures bike wheels and sells them to
customers for $35 each. Its fixed cost per wheel is $5.20 and its variable cost is $12.95.
Liberty's upper management asks the wheel division to transfer 30,000 wheels to
another division within the company. Which of the following negotiated transfer prices
between the two divisions suggests that the wheel division is operating with adequate
excess capacity? - answer>>>$18.15
Which of the following is not an objective of using transfer prices? - answer>>>Transfer
prices are used to value transfers to external parties.
The Epic Company sells suit jackets and buttons. The button division can produce 200,000
buttons per year and sells 160,000 buttons externally for $.30 each. The buttons produce
a contribution margin of $.16 per button. The suit jacket division needs 40,000 buttons
this year and currently pays $.18 per button to purchase the buttons externally. Should
the button division sell the buttons to the suit division, why or why not? - answer>>>Yes,
the Epic Company will save $.04 per button.
The noodles division of Presto Pasta manufactures 500,000 pounds of dried spaghetti
each year and sells it to outside customers for $1.80 per pound. The variable cost per
pound is $0.75, and the division is currently operating at full capacity. Presto's
COMPLETE EXAM LATEST VERSION 2026-2027
QUESTIONS AND 100% Verified ANSWERS
Which of the following statements best describes the impact that changing exchange
rates have on a manager's performance evaluation in multinational companies? -
answer>>>If currency management is decentralized within an organization, individual
managers should be held accountable for the impact of changing exchange rates on
performance measures.
The socket division of Lehigh Lighting manufactures bulb sockets and sells them to
customers for $6.20 per unit. Each bulb socket has a variable cost of $3.00 per unit, and a
fixed cost of $0.85. Lehigh's management would like the socket division to transfer
25,000 sockets to another division within the company. If the socket division sold sockets
internally, it would avoid $0.60 of variable packaging costs per unit. Assuming the socket
division has enough extra capacity to manufacture the 25,000 sockets, what is its
minimum transfer price per unit? - answer>>>$2.40
The alternator division of Tiny Autos manufactures alternators and sells them to
customers for $120 each. The division is currently operating at full capacity, and its cost
breakdown for each alternator is as follows:
Direct materials cost$33Variable labor cost$11Variable overhead cost$10Fixed overhead
cost$9
Tiny's upper management wants the alternator division to sell 10,000 alternators to
another division within the company. The alternator division could avoid variable
overhead costs of $3 per unit by selling internally. If the two divisions ultimately agree to
a transfer price of $120 per unit, the alternator division will make: - answer>>>$30,000
more than it would have made if it had agreed to its minimum acceptable transfer price.
,Robert Scott Lumber Company has a cutting division that cuts red oak trees into boards
and a finishing division that makes red oak boards into custom woodwork used in
renovation of historic buildings. Costs per board foot for the cutting division are:
Direct material$3.00Direct labor$1.25Variable overhead$0.75Fixed overhead$0.20
The cutting division sells boards to external customers for $6.50 per board foot, but has
capacity to sell to the finishing division as well. The finishing department has been
purchasing lumber from an outside vendor for $6.50 per board foot. If the cutting
department starts transferring lumber to the finishing department, calculate the
minimum transfer price. - answer>>>$5.00
Vroom Motorcycle Company, headquartered in the United States, presently
manufactures their motorcycles in the country of Utopia due to their lower costs of
production, low tariffs, favorable exchange rates, and access to lower cost raw materials,
which are 50% lower than that of the U.S.. However, in recent years, Utopia has seen a
boom in companies relocating their production to Utopia. Due to this factor, the
exchange rates have become unfavorable to Vroom, and as a result the cost of raw
materials has increased over 25% in the past year. Which of the following actions would
you recommend Vroom's management take? - answer>>>Continue operations as they
are, however, closely monitor the current economic situation in Utopia.
An appropriate transfer price between two divisions of Vroom Motorcycle Company can
be determined from the following data:
Fabricating division: Market price of subassembly$75 Variable cost of subassembly$30
Excess capacity (in units)50Assembling Division: Number of units needed45
What is the natural bargaining range for the two divisions? - answer>>>Any amount
between $30 and $75.
,Which of the following is a disadvantage of using the full-cost model for determining
transfer prices? - answer>>>There is no motivation for the internal supplier to produce
the good or service in an efficient way.
The alternator division of Moto Motorcycles manufactures alternators and sells them to
customers for $80 each. The cost breakdown for each alternator is as follows:
Direct materials cost$23Variable labor cost$9Variable overhead cost$7Fixed overhead
cost$5
Moto's upper management wants the alternator division to sell 10,000 alternators to
another division within the company. If the alternator division sold internally, it could
avoid variable overhead costs of $2 per unit. Assuming the alternator division is
operating at full capacity, what would be the minimum transfer price per alternator? -
answer>>>$78
The media division of Dakota Biological Supply Company produces media for growing
fungi, which can either be sold to the fungal division for growing cultures or sold to
outside entities. The cost sheet for pre-poured plates of potato dextrose agar, which are
sold in 10 plate units, is as follows:
Direct material$ 3.75Direct labor$ 6.50Variable overhead$ 1.25Fixed overhead$
3.50Selling price per 10 plates$25.00
The fungal division needs 10,000 plates of potato dextrose agar annually. Currently, the
fungal division purchases them from Arizona Lab Supplies for $25.00 for a unit of 10
plates because the media division has no excess capacity. However, recently the media
division has lost a major customer and now has the capacity to provide the plates. What
would be the minimum transfer price per sleeve of 10 plates? - answer>>>$11.50 per
unit
, Which of the following is an advantage of using the full-cost model for determining
transfer prices? - answer>>>The selling division will not lose money on a transfer
occurring at full cost.
The fabric division of Sweet Petunia's Baby Gear produces fabric designs to be used by
the furniture division. The fabric division sells fabric to outside customers for $800 per
bolt. Variable product costs total $575 per bolt, while variable selling and administrative
costs are $75 per bolt. What is the transfer price if a market-based transfer policy is in
effect? - answer>>>$800 per bolt
The wheel division of Liberty Bicycles manufactures bike wheels and sells them to
customers for $35 each. Its fixed cost per wheel is $5.20 and its variable cost is $12.95.
Liberty's upper management asks the wheel division to transfer 30,000 wheels to
another division within the company. Which of the following negotiated transfer prices
between the two divisions suggests that the wheel division is operating with adequate
excess capacity? - answer>>>$18.15
Which of the following is not an objective of using transfer prices? - answer>>>Transfer
prices are used to value transfers to external parties.
The Epic Company sells suit jackets and buttons. The button division can produce 200,000
buttons per year and sells 160,000 buttons externally for $.30 each. The buttons produce
a contribution margin of $.16 per button. The suit jacket division needs 40,000 buttons
this year and currently pays $.18 per button to purchase the buttons externally. Should
the button division sell the buttons to the suit division, why or why not? - answer>>>Yes,
the Epic Company will save $.04 per button.
The noodles division of Presto Pasta manufactures 500,000 pounds of dried spaghetti
each year and sells it to outside customers for $1.80 per pound. The variable cost per
pound is $0.75, and the division is currently operating at full capacity. Presto's
