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Which of the Following Would Not Be Relevant to a Decision

Question 78
Multiple Choice

Which of the following would not be relevant to a decision about whether to continue making a part or whether to buy it from an outside supplier? A) alternative uses for the plant where the part was produced if the part is purchased B) a fee previously spent for design of the part C) the variable costs of making the part D) the number of additional employees needed to make the part

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In making a decision to replace a machine,which of the following is not relevant? A) the training that workers will need in order to use the new machine B) the variable costs of operating the new machine C) the variable costs of operating the old machine D) the book value of the old machine
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Which of the following is not true of the direct costing procedure? A) Variable and fixed costs are considered as part of the cost of goods manufactured. B) The cost of goods sold,based solely on variable costs,is subtracted from net sales to arrive at the manufacturing margin. C) Variable selling expenses are deducted from the manufacturing margin. D) Variable administrative expenses are deducted from the manufacturing margin.
Q 81
In its first year of operations,a company has sales of $100,000,ending finished goods inventory of $9,000,variable manufacturing costs of $50,000,and fixed manufacturing costs of $28,000 for the year.Assuming the company uses direct costing,the manufacturing margin for the year is A) $22,000. B) $31,000. C) $59,000. D) $13,000.
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