C.

lost wages at Grill 'Em Hot

51. Annie North currently works as the fry gal at Grill em' Hot Drive but is thinking of
going to grad school full time next semester. Which of the following would be
considered a ____ decision?
A. the cost of textbooks
B. the cost of the cell phone she will need for texting during class
C. lost wages at Grill 'Em Hot
D. Both A and B
D. contribution margin per unit of the constraining resource
When a multi-product factory operated at full capacity, decision must be made about
what products emphasize. In making such decisions, products should be ranked based
on:
A. selling price per unit
B contribution margin per unit
C. Unit sales volume
D. contribution margin per unit of the constraining resource
A. an operating activity
In a statement of cash flows, a change in accounts receivables would be classified as.
A. an operating activity
B. a financing activity
C. an investing activity
D. a noncash item that need not appear on the statement of cash flows
• $50,000
54. The federated Bank Bell company has two divisions- East and West. The divisions
have the following revenues and expenses: East West
Sales........................................... $720,000 $350,000
Variable costs.................................370,000 240,000
Traceable fixed costs.........................130, 000 80,000
Allocated corporate executive bonuses....120, 000 50,000
Net operating income (loss).................$100,000 $(20,000___)
Management at FFB is pondering the elimination of the West division since it has shown
a ___ in the past several years. If the West division were eliminated, its traceable foxed
costs (the ___) could be avoided. Total corporate bonuses would be unaffected by this
decision. Given the __ elimination of the West Division would result in retaining bonuses
for executives and a __ operating income of:
• $100,000
• $80,000
• $120,000
• $50,000
A increase by $2,000
Hoosier company produces and sells 8000 units of product 413 each year. Each____
$10 has a contribution margin of $6. It is estimated that is product 413 is discontinued
___ $60000 in fixed costs charged to product 413 could be eliminated. The data include
discontinued, overall company net operating income per year should:
A increase by $2,000
B. decrease by $2,000
C_________
D decrease by $38,000
C. decrease by $20000
The management of Austin Corporation is considering dropping product R07C. Data
from the companies accounting system appear below
Sales-$130000
Variable Expense-$56000
Fixed Manufacturing expense-$49000
Fixed Selling and administrative expense-$35000
In the company's accounting system all fixed expenses of the company are fully
allocated to products further investigation has revealed that $34000 of the fixed
manufacturing expenses and $20,000 of the fixed selling and administrative expenses
are avoidable if product R97C is discontinued. Discontinuing the product will cause net
operating income to:
A.increase by $20000
B. increase by $10000
C. decrease by $20000
D. decrease by $10000
B $19,000 increase
A year ago Spritzy Soft Drink Corporation bought a stamping machine to make its cans
for its cols. The cost of the machine was $60000. The machine has a useful life of 5
years and a salvage value of Zero at the end of those five years. Annual depreciation of
the machine is $12,000. One year of depreciation has been recorded. The variable
manufacturing cost of producing the cans is $0.05 per can. The only fixed
manufacturing cost is the annual depreciation of $12,000 on the stamping machine.
Spritzy needs 200,000 cans annually. Dagmadre Stamping company recently gave
Spritzy an offer to supply all of its cans for the next four years at $0.07 per can. If
Spritzy buys from Dagmadre, the stamping machine wouldn't be needed and would be
sold for $35,000. If Spritzy buys from Dagmadre, what will be the total depreciation
decrease in income for the next four years?
A $16,000 decrease
B $19,000 increase
C. $29,000 decrease
D. $32,000 increase
D. $5,900
58. Nebring Inc. has some material that originally costs $73500. The material has a
scrap value of $45,000 as is but if reworked at a cost of $6,600 it could be sold for
$58,100. What would be the incremental effect of the company's overall profit of
reworking and selling the material rather than selling it as is as scrap?
A. -$22,000
B. -$67,600
C. $ 51,500
D. $5,900
E. $4______
A. $4,000 to have the vehicle restored
Cybill Baunt just inherited a 1958 Chevy Impala from her late Aunt Joop. Aunt Joop
purchases the car 25 years ago for $5,000. Cybill is either going to sell the car for
$2000 or have it restored and sell it for $16000 the restoration will cost $10,000. Cybill
would be better off by how much money?
A. $4,000 to have the vehicle restored
B. $6,000 to have the vehicle restored
C. $9,000 to have the vehicle restored
D. $11,000 to have the vehicle restored
D. would increase the company's overall net operating income by $2,000 if processed
further
The Freed Company produced three products LM, ZY, EF, from a single raw material
input. Product ___ be sold at the split-off point for total revenue of $50,000 or it can be
processed further at a total cost of $16,000 and then sold for $68,000. Product ZY:
A. should be sold at the split off point, rather than processed further
B. would increase the company's overall net operating income by $18,000 if processed
further and than ___
C. would increase the company's overall net operating income by $68,000 if processed
further and than___
D. would increase the company's overall net operating income by $2,000 if processed
further
Costs that are always relevant in decision-making are?
A. variable costs.
B. avoidable costs.
C. sunk costs.
D. fixed costs.
b
Consider a decision facing a firm of either accepting or rejecting a special offer for one
of its products.
A cost that is not relevant is?
A. direct materials.
B. variable overhead.
C. fixed overhead that will be avoided if the special offer is accepted.
D. common fixed overhead that will continue if the special offer is not accepted.
d
To maximize total contribution margin, a firm faced with a production constraint should?
A. promote those products having the highest unit contribution margins.
B. promote those products having the highest contribution margin ratios.
C. promote those products having the highest contribution margin per unit of
constrained resource.
D. promote those products having the highest contribution margins and contribution
margin ratios.
c
A plant operating at capacity would suggest that most likely?
A. every machine and person in the plant is working at the maximum possible rate.
B. only some specific machines or processes are operating at the maximum rate
possible.
C. fixed costs will need to change to accommodate increased demand.
D.managers should produce those products with the highest contribution margin in
order to deal with the
constrained resource.
b
Which of the following is not an effective way of dealing with a production constraint
(i.e., bottleneck)?
A. reduce the number of defective units produced at the bottleneck.
B. pay overtime to workers assigned to the bottleneck.
C. pay overtime to workers assigned to work stations located after the bottleneck in the
production
process.
D. subcontract work that would otherwise required use of the bottleneck.
c
The opportunity cost of making a component part in a factory with no excess capacity is
the? A. variable manufacturing cost of the component.
B. fixed manufacturing cost of the component.
C. cost of the production given up in order to manufacture the component.
D. net benefit foregone from the best alternative use of the capacity required.
d
Which of the following is one of the advantages to the target costing approach?
A. costs are fully known before the product is actually designed.
B. there is usually a higher level of cost-consciousness than in the cost plus approach.
C. this approach often leads to higher levels of features included that some customers
may want. D. it can be completed by marketing department personnel without involving
others in the process.
b
The Lantern Corporation has 1,000 obsolete lanterns that are carried in inventory at a
manufacturing cost of $20,000. If the lanterns are remachined for $5,000, they could be
sold for $9,000. Alternatively, the lanterns could be sold for scrap for $1,000. Which
alternative is more desirable and what are the total relevant costs for that alternative?
A. remachine and $5,000.
B. remachine and $25,000.
C. scrap and $19,000.
D. scrap and $20,000.
a
Relay Corporation manufactures batons. Relay can manufacture 300,000 batons a year
at a variable cost of $750,000 and a fixed cost of $450,000. Based on Relay's
predictions for next year, 240,000 batons will be sold at the regular price of $5.00 each.
In addition, a special order was placed for 60,000 batons to be sold at a 40% discount
off the regular price. Total fixed costs would be unaffected by this order. By what
amount would the company's net operating income be increased or decreased as a
result of the special order?
A. $30,000 increase. B. $36,000 increase. C. $60,000 decrease. D. $180,000 increase.
a
The manufacturing capacity of Jordan Company's facilities is 30,000 units a year. A
summary of operating results for last year follows:
A foreign distributor has offered to buy 15,000 units at $90 per unit next year. Jordan
expects its regular sales next year to be 18,000 units. If Jordan accepts this offer and
rejects some business from regular customers so as not to exceed capacity, what would
be the total net operating income next year? (Assume that the total fixed costs would be
the same no matter how many units are produced and sold.)
A. $390,000.
B. $705,000.
C. $840,000.
D. $855,000.
b

Wagner Company sells product A for $21 per unit. Wagner's unit product cost
based on the full capacity of 200,000 units is as follows:
A special order offering to buy 20,000 units has been received from a foreign
distributor. The only selling costs that would be incurred on this order would
be $3 per unit for shipping. Wagner has sufficient idle capacity to manufacture
the additional units. Two-thirds of the manufacturing overhead is fixed and
would not be affected by this order. Assume that direct labour is an avoidable
cost in this decision. In negotiating a price for the special order, the minimum
acceptable selling price per unit should be?
A. $14.
B. $15.
C. $16.
D. $18.

Costs that are always relevant in

decision-making are?
A. variable costs.
B. avoidable costs.
C. sunk costs.
D. fixed costs.
Consider a decision facing a firm of either
accepting or rejecting a special offer for one of its
products.
A cost that is not relevant is?
A. direct materials.
B. variable overhead.
C. fixed overhead that will be avoided if the
special offer is accepted.
D. common fixed overhead that will continue if
the special offer is not accepted.
To maximize total contribution margin, a firm faced
with a production constraint should?
A. promote those products having the highest unit
contribution margins.
B. promote those products having the highest
contribution margin ratios.
C. promote those products having the highest
contribution margin per unit of constrained resource.
D. promote those products having the highest
contribution margins and contribution margin ratios.
A plant operating at capacity would suggest that most
likely?
A. every machine and person in the plant is working at the
maximum possible rate.
B. only some specific machines or processes are
operating at the maximum rate possible.
C. fixed costs will need to change to accommodate
increased demand.
D.managers should produce those products with the
highest contribution margin in order to deal with the
constrained resource.
Which of the following is not an effective way of
dealing with a production constraint (i.e., bottleneck)?
A. reduce the number of defective units produced at
the bottleneck.
B. pay overtime to workers assigned to the
bottleneck.
C. pay overtime to workers assigned to work
stations located after the bottleneck in the
production
process.
D. subcontract work that would otherwise required
use of the bottleneck.
The opportunity cost of making a component part
in a factory with no excess capacity is the? A.
variable manufacturing cost of the component.
B. fixed manufacturing cost of the component.
C. cost of the production given up in order to
manufacture the component.
D. net benefit foregone from the best
alternative use of the capacity required.
Which of the following is one of the advantages to
the target costing approach?
A. costs are fully known before the product is
actually designed.
B. there is usually a higher level of cost-
consciousness than in the cost plus approach.
C. this approach often leads to higher levels of
features included that some customers may want.
D. it can be completed by marketing department
personnel without involving others in the process.
The Lantern Corporation has 1,000 obsolete lanterns that
are carried in inventory at a manufacturing cost of
$20,000. If the lanterns are remachined for $5,000, they
could be sold for $9,000. Alternatively, the lanterns could
be sold for scrap for $1,000. Which alternative is more
desirable and what are the total relevant costs for that
alternative?
A. remachine and $5,000.
B. remachine and $25,000.
C. scrap and $19,000.
D. scrap and $20,000.
Relay Corporation manufactures batons. Relay can
manufacture 300,000 batons a year at a variable cost of
$750,000 and a fixed cost of $450,000. Based on Relay's
predictions for next year, 240,000 batons will be sold at
the regular price of $5.00 each. In addition, a special order
was placed for 60,000 batons to be sold at a 40% discount
off the regular price. Total fixed costs would be unaffected
by this order. By what amount would the company's net
operating income be increased or decreased as a result of
the special order?
A. $30,000 increase. B. $36,000 increase. C. $60,000
decrease. D. $180,000 increase.
The manufacturing capacity of Jordan Company's facilities is 30,000
units a year. A summary of operating results for last year follows:
A foreign distributor has offered to buy 15,000 units at $90 per unit
next year. Jordan expects its regular sales next year to be 18,000
units. If Jordan accepts this offer and rejects some business from
regular customers so as not to exceed capacity, what would be the
total net operating income next year? (Assume that the total fixed
costs would be the same no matter how many units are produced and
sold.)
A. $390,000.
B. $705,000.
C. $840,000.
D. $855,000.
Wagner Company sells product A for $21 per unit. Wagner's unit product cost
based on the full capacity of 200,000 units is as follows:
A special order offering to buy 20,000 units has been received from a foreign
distributor. The only selling costs that would be incurred on this order would
be $3 per unit for shipping. Wagner has sufficient idle capacity to manufacture
the additional units. Two-thirds of the manufacturing overhead is fixed and
would not be affected by this order. Assume that direct labour is an avoidable
cost in this decision. In negotiating a price for the special order, the minimum
acceptable selling price per unit should be?
A. $14.
B. $15.
C. $16.
D. $18.

A study has been conducted to determine if one of the

departments in Parry Company should be discontinued. The
contribution margin in the department is $50,000 per year.
Fixed expenses charged to the department are $65,000 per
year. It is estimated that $40,000 of these fixed expenses could
be eliminated if the department is discontinued. These data
indicate that if the department is discontinued, the company's
overall net operating income would?
A. decrease by $10,000 per year.
B. increase by $10,000 per year.
C. decrease by $25,000 per year.
D. increase by $25,000 per year.

A study has been conducted to determine if Product A

should be dropped. Sales of the product total
$200,000 per year; variable expenses total $140,000
per year. Fixed expenses charged to the product total
$90,000 per year. The company estimates that
$40,000 of these fixed expenses will continue even if
the product is dropped. These data indicate that if
Product A is dropped, the company's overall net
operating income would?
A. decrease by $10,000 per year. B. increase by
$20,000 per year. C. decrease by $20,000 per year.
D. increase by $30,000 per year.
Lusk Company produces and sells 15,000 units of Product
A each month. The selling price of Product A is $20 per
unit, and variable expenses are $14 per unit. A study has
been made concerning whether Product A should be
discontinued. The study shows that $70,000 of the
$100,000 in fixed expenses charged to Product A would
continue even if the product were discontinued. These
data indicate that if Product A is discontinued, the
company's overall net operating income would?
A. increase by $10,000 per month. B. decrease by
$20,000 per month. C. increase by $20,000 per month. D.
decrease by $60,000 per month.

Manor Company plans to discontinue a department

that has a contribution margin of $24,000 and
$48,000 in fixed costs. Of the fixed costs, $21,000
cannot be avoided. The effect of this
discontinuance on Manor's overall net operating
income would be a(an)?
A. decrease of $3,000.
B. increase of $3,000.
C. decrease of $24,000.
D. increase of $24,000.
Gata Co. plans to discontinue a department that
has a $48,000 contribution margin and $96,000 of
fixed costs. Of these fixed costs, $42,000 cannot
be avoided. What would be the effect of this
discontinuance on Gata's overall net operating
income?
A. increase of $6,000.
B. decrease of $6,000.
C. increase of $48,000.
D. decrease of $48,000.
The Cook Company has two divisions—Eastern and Western.
The divisions have the following revenues and expenses:
The management of Cook is considering the elimination of the
Eastern Division. If the Eastern Division were eliminated, the
direct fixed costs associated with this division could be avoided.
However, corporate costs would still be $305,000 in total. Given
these data, the elimination of the Eastern Division would result in
an overall company net income (loss) of?
A. $15,000.
B. ($60,000).
C. ($75,000).
D. ($155,000).
Manor Company plans to discontinue a
department that has a contribution margin of
$25,000 and $50,000 in fixed costs. Of the fixed
costs, $21,000 cannot be eliminated. The effect
on the profit of Manor Company of discontinuing
this department would be?
A. a decrease of $4,000.
B. an increase of $4,000.
C. a decrease of $25,000.
D. an increase of $25,000.
Green Company produces 1,000 parts per year, which are used
in the assembly of one of its products. The unit product cost of
these parts is:
The part can be purchased from an outside supplier at $20 per
unit. If the part is purchased from the outside supplier, two
thirds of the fixed manufacturing costs can be eliminated. The
annual impact on the company's net operating income as a
result of buying the part from the outside supplier would be?
A. $1,000 increase.
B. $1,000 decrease.
C. $2,000 decrease.
D. $5,000 increase.
Pitkin Company produces a part used in the manufacture of one of its
products. The unit product cost of the part is $33, computed as
follows:
An outside supplier has offered to provide the annual requirement of
10,000 of the parts for only $27 each. The company estimates that
30% of the fixed manufacturing overhead costs above will continue if
the parts are purchased from the outside supplier. Assume that direct
labour is an avoidable cost in this decision. Based on these data, the
per unit dollar advantage or disadvantage of purchasing the parts from
the outside supplier would be?
A. $1 disadvantage.
B. $1 advantage.
C. $3 advantage.
D. $4 disadvantage.
Cardinal Company needs 20,000 units of a certain part to use in one
of its products. The following information is available:
Oriole Company has offered to sell this part to Cardinal company for
$36 each. If Cardinal buys the part from Oriole instead of making it,
Cardinal would not have any use for the released capacity. In addition,
60% of the fixed manufacturing overhead costs will continue
regardless of what decision is made. Assume that direct labour is an
avoidable cost in this decision. In deciding whether to make or buy the
part, the total relevant costs to make the part are?
A. $560,000.
B. $640,000.
C. $720,000.
D. $760,000.
Golden, Inc., has been manufacturing 5,000 units of Part 10541 which
is used in one of its products. At this level of production, the unit
product cost of Part 10541 is as follows:
Brown Company has offered to sell Golden 5,000 units of Part 10541
for $19 a unit. Golden has determined that two thirds of the fixed
manufacturing overhead will continue even if Part 10541 is purchased
from Brown. Assume that direct labour is an avoidable cost in this
decision. To determine whether to accept Brown's offer, the relevant
costs to Golden of manufacturing the parts internally are?
A. $70,000.
B. $80,000.
C. $90,000.
D. $95,000.

The following standard costs pertain to a component part

manufactured by Ashby Company:
The company can purchase the part from an outside supplier for
$25 per unit. The manufacturing overhead is 60% fixed and this
fixed portion would not be affected by this decision. Assume that
direct labour is an avoidable cost in this decision. What is the
relevant amount of the standard cost per unit to be considered in
a decision of whether to make the part internally or buy it from the
external supplier?
A. $2.
B. $15.
C. $19.
D. $27.
The SP Company makes 40,000 motors to be used in the production of its
sewing machines. The average cost per motor at this level of activity is:
An outside supplier recently began producing a comparable motor that could
be used in the sewing machine. The price offered to SP Company for this
motor is $18. If SP Company decides not to make
the motors, there would be no other use for the production facilities and total
fixed factory overhead costs would not change. If SP Company decides to
continue making the motor, how much higher or lower would net income be
than if the motors are purchased from the outside suppler? Assume that direct
labour is a variable cost in this company.
A. $86,000 higher.
B. $92,000 lower.
C. $178,000 higher.
D. $276,000 higher.
Manico Company produces three products—X, Y, &
Z—with the following characteristics:
The company has only 2,000 machine-hours available
each month. If demand exceeds the company's
capacity, in what sequence should orders be filled if
the company wants to maximize its total contribution
margin?
A. orders for Z first, X second, and Y third.
B. orders for X first, Z second, and Y third.
C. orders for Y first, X second, and Z third.
D. orders for Z first and no orders for X or Y.
51. Annie North currently works as the fry gal at Grill em' Hot Drive but is thinking of going to grad
school full time next semester. Which of the following would be considered a ____ decision?

A. the cost of textbooks

B. the cost of the cell phone she will need for texting during class

C. lost wages at Grill 'Em Hot

D. Both A and B

When a multi-product factory operated at full capacity, decision must be made about what products emphasize. In making
such decisions, products should be ranked based on:
A. selling price per unit
B contribution margin per unit
C. Unit sales volume
D. contribution margin per unit of the constraining resource

In a statement of cash flows, a change in accounts

receivables would be classified as.
A. an operating activity
B. a financing activity
C. an investing activity
D. a noncash item that need not appear on the statement of
cash flows
54. The federated Bank Bell company has two divisions- East and West. The divisions have
the following revenues and expenses: East West
Sales........................................... $720,000 $350,000
Variable costs.................................370,000 240,000
Traceable fixed costs.........................130, 000 80,000
Allocated corporate executive bonuses....120, 000 50,000
Net operating income (loss).................$100,000 $(20,000___)
Management at FFB is pondering the elimination of the West division since it has shown a
___ in the past several years. If the West division were eliminated, its traceable foxed costs
(the ___) could be avoided. Total corporate bonuses would be unaffected by this decision.
Given the __ elimination of the West Division would result in retaining bonuses for
executives and a __ operating income of:
• $100,000
• $80,000
• $120,000
• $50,000

Hoosier company produces and sells 8000 units of

product 413 each year. Each____ $10 has a contribution
margin of $6. It is estimated that is product 413 is
discontinued ___ $60000 in fixed costs charged to product
413 could be eliminated. The data include discontinued,
overall company net operating income per year should:
A increase by $2,000
B. decrease by $2,000
C_________
D decrease by $38,000
The management of Austin Corporation is considering dropping product R07C. Data from the
companies accounting system appear below
Sales-$130000
Variable Expense-$56000
Fixed Manufacturing expense-$49000
Fixed Selling and administrative expense-$35000
In the company's accounting system all fixed expenses of the company are fully allocated to
products further investigation has revealed that $34000 of the fixed manufacturing expenses
and $20,000 of the fixed selling and administrative expenses are avoidable if product R97C is
discontinued. Discontinuing the product will cause net operating income to:
A.increase by $20000
B. increase by $10000
C. decrease by $20000
D. decrease by $10000

A year ago Spritzy Soft Drink Corporation bought a stamping machine to make
its cans for its cols. The cost of the machine was $60000. The machine has a
useful life of 5 years and a salvage value of Zero at the end of those five years.
Annual depreciation of the machine is $12,000. One year of depreciation has
been recorded. The variable manufacturing cost of producing the cans is $0.05
per can. The only fixed manufacturing cost is the annual depreciation of $12,000
on the stamping machine. Spritzy needs 200,000 cans annually. Dagmadre
Stamping company recently gave Spritzy an offer to supply all of its cans for the
next four years at $0.07 per can. If Spritzy buys from Dagmadre, the stamping
machine wouldn't be needed and would be sold for $35,000. If Spritzy buys from
Dagmadre, what will be the total depreciation decrease in income for the next
four years?
A $16,000 decrease
B $19,000 increase
C. $29,000 decrease
D. $32,000 increase

58. Nebring Inc. has some material that originally costs

$73500. The material has a scrap value of $45,000 as is
but if reworked at a cost of $6,600 it could be sold for
$58,100. What would be the incremental effect of the
company's overall profit of reworking and selling the
material rather than selling it as is as scrap?
A. -$22,000
B. -$67,600
C. $ 51,500
D. $5,900
E. $4______
Cybill Baunt just inherited a 1958 Chevy Impala from her late Aunt Joop. Aunt Joop purchases the car 25 years ago for $5,000. Cybill is
either going to sell the car for $2000 or have it restored and sell it for $16000 the restoration will cost $10,000. Cybill would be better off by
how much money?
A. $4,000 to have the vehicle restored
B. $6,000 to have the vehicle restored
C. $9,000 to have the vehicle restored
D. $11,000 to have the vehicle restored

The Freed Company produced three products LM, ZY, EF, from
a single raw material input. Product ___ be sold at the split-off
point for total revenue of $50,000 or it can be processed further
at a total cost of $16,000 and then sold for $68,000. Product
ZY:
A. should be sold at the split off point, rather than processed
further
B. would increase the company's overall net operating income
by $18,000 if processed further and than ___
C. would increase the company's overall net operating income
by $68,000 if processed further and than___
D. would increase the company's overall net operating
income by $2,000 if processed further
Kava Inc. Manufactured industrial components. One of its products, which is used in the construction of industrial air
conditioners, is known as K65. Data concerning this product are given below. Per unit
Selling price...................................$180
Direct materials................................$29
Direct labor..................................... $5
Variable manufacturing overhead.........$4
Fixed manufacturing expense..............$21
Variable selling expense................... $2
Fixed selling and administrative expense...$17
The above per unit data are based on annual production of 4,000 units of the component. Direct labor __considered
to be a variable cost. The company has received a special, one time only order for component K65. There would be
no variable selling expense on this special order and the ___manufacturing overhead and fixed selling and
administrative expenses of the company would ___by the order. Assuming that Kava has excess capacity and can fill
the order without cutting production of any product, what is the minimum price per unit on the special order below___
should not go?
• $180
• $38
• $59
• $78

The constraint at Pulman Corporation is time on a particular machine. The

company makes three products that use the machine. Data concerning those
products appear bellow.
YO EG SS
Selling price per unit....... $342.57 $276.46 $116.28
Variable cost per unit......$273.03 $219.88 $87.97
Minutes on the constraint...5.70 4.60 1.90
Assume that sufficient time is available on the constrained machine to satisfy
demand for all but the least profitable product. Up to how much should the
company be willing to pay to acquire more of the constrained recourse?
• $28.31 per unit
• $12.20 per min
• 14.90 per min
• $69.54 per unit

Sheela Dairy Corporation buys unprocessed cows' milk

from local farmers. At the dairy ,____ is broken down into
cream and low-fat milk. The cream can be sold at this
point or can be made into butter. Which of the following
would be relevant in the decision to further process the
milk.
A. the amount paid to the farmer to purchase the
unprocessed milk
B. the cost of breaking down the unprocessed milk
into cream and low-fat milk
C. the portion of corporate fixed expenses that are
currently being allocated to _____
D. none of these
An increase in the bonds payable account of
$200,000 over the course of a year would be
shown in the company's statement of cash
flows prepared under the indirect method as...
• An addition of $200,000 under investing
activities
• A deduction of $200,000 investing
activities
• An addition of $200,000 under financing
activities
• A deduction of $200,000 under financing
activities
An increase in the accumulated depreciation account of
$50,000 over the course of a year would be showed in the
company's statement of cash flows prepared under the
indirect method as.
A). an addition to net income of $50,000 in order to
arrive at net cash provided by operating activities
B a deduction from net income of $50,000 in order to
arrive at net cash provided by operating activities
C) An addition of $50,000 under investing activities
D) A deduction of $50,000 under investing activities
) Gudger Corporation processes sugar cane in batches. The company
purchases a batch of ____ from farmers and then crushes the cane in
the company's plant at the cost of $10. Two into___ cane fiber and
cane juice, emerge from the crushing process. The cane fiber can be
sold___processed further for $15 to make the end product industrial
fiber that is sold for $60. The ___sold as is for $38 or processed
further for $22 to make the end product of molasses that ___ the
intermediate products should be processed further?
A. cane fiber should be processed into industrial fiber; cane juice
should not be___
B. cane fiber should not be processed into industrial fiber; cane juice
should be__
C. Cane fiber should not be processed into industrial fiber; cane juice
should not be ___molasses
D. Cane fiber should be processed into industrial fiber; cane juice
should be ___

The constraint at Pulman Corporation is time on a particular

machine. The company makes three products that use the
machine. Data concerning those products appear bellow.
YO EG SS
Selling price per unit....... $342.57 $276.46 $116.28
Variable cost per unit......$273.03 $219.88 $87.97
Minutes on the constraint...5.70 4.60 1.90
Assume that sufficient time is available on the constrained
machine to satisfy demand for all but the least profitable
product. Up to how much should the company be willing to pay
to acquire more of the constrained recourse?