Question 1

A local learning center is considering replacing the computers in its facility with thin client technology,thereby eliminating the need for individual computers at each station in the lab.The cost to purchase and install this new technology is $450,000 and it is projected to last for six years.The existing computers have a book value of $70,000 and a market value of $18,000 if they were to be sold.They expect to save a fair amount of money in maintenance costs and software upgrades if they go to the new technology.
Required:
a.What would the annual savings have to be in order to warrant the replacement of the existing computers with the thin client technology?
b.What would the annual savings have to be in order to warrant the replacement of the existing computers with the thin client technology if the existing computers have no current market value?

Accepted Answer

The answer of A local learning center is considering replacing...

Question 2

Impact on relationships with customers,company image,and employee morale are all examples of _________________________ decision factors.

Accepted Answer

The answer of Impact on relationships with customers,company image,and employee...

Question 3

A cost-plus method of determining a product's selling price adds a _________________________ to total product cost to reach a target price.

Accepted Answer

The answer of A cost-plus method of determining a product's...

Question 4

A _____________________ arises from a past decision and cannot be avoided or changed; it is irrelevant to future decisions.

Accepted Answer

The answer of A _____________________ arises from a past decision...

Question 5

A company produces three different products that all require processing on the same machines.There are only 17,000 machine hours available in each year.Production information for each product is:
 $\begin{array}{lrrr}
&\text { A}&\text { B}&\text { C}\
\text { Sales price per unit } & \$ 22.00 & \$ 34.00 & \$ 46.00 \
\text { Variable costs per unit } & \$ 10.00 & \$ 19.00 & \$ 25.30 \
\text { Machine hours necessary to produce one unit } & .75 & 1.2 & 2.3
\end{array}$ 
Required:
a.Determine the preferred sales mix if there are no market constraints on any of the products.
b.Determine the preferred sales mix if the demand is limited to 7,000 units for each product.
c.Determine the preferred sales mix if the demand is limited to 8,000 units for each product.

Accepted Answer

The answer of A company produces three different products that...

Question 6

Relevant costs are also known as ___________________.

Accepted Answer

The answer of Relevant costs are also known as ___________________....

Question 7

In a constrained resource situation,a company should maximize contribution margin per _______________________________.

Accepted Answer

The answer of In a constrained resource situation,a company should...

Question 8

A company expects its three departments to yield the following income for next year:
 $$\begin{array} { l r r r } 
& \text { Dept. X } & \text { Dept. Y } & \text { Dept. Z } \
\text { Sales } & \$ 94,000 & \$ 15,000 & \$ 70,000 \
\text { Expenses } & & & \
\text { Avoidable } & 71,000 & 2,000 & 52,000 \
 \text { Unavoidable } & \underline{4,000} & \underline{7,000} & \underline{20,000} \
\text { Total expenses }& \underline{75,000} & \underline{9,000} & \underline{72,000} \
\text {Net income (loss)}& \underline{\underline{\$ 19,000}} & \underline{\underline{\$ 6,000}} & \underline{\underline{\$ ( 2,000 )}}
\end{array}$$ 
Required: Compute the following independent calculations:
a.The effect on total company income if Dept.X is eliminated.
b.The effect on total company income if Dept.Y is eliminated.
c.The effect on total company income if Dept.Z is eliminated.
d.Should any of these departments be eliminated? Why of why not?

Accepted Answer

The answer of A company expects its three departments to...

Question 9

Costs already incurred in manufacturing the units of a product that do not meet quality standards are _________________________ costs.

Accepted Answer

The answer of Costs already incurred in manufacturing the units...

Question 10

An ______________________________ is the potential benefit lost by taking a specific action when two or more alternative choices are available.

Accepted Answer

The answer of An ______________________________ is the potential benefit lost...

Question 11

A _______________________________ is the combination of products sold by a company.

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The answer of A _______________________________ is the combination of products...

Question 12

In this chapter,you examined several short-term managerial decision tasks.Identify (list)any three of these types of decision tasks:
_________________________
_________________________
_________________________

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The answer of In this chapter,you examined several short-term managerial...

Question 13

Doggy Day Park Inc.currently has a special tank used to provide exercise hydro therapy for the dogs.The current book value of the tank is $25,000 and they could sell it for $12,000 if they wanted to do so.Doggy is evaluating a new tank system that will provide additional therapy capability.The new tank will cost $55,000 and will save $7,500 per year in operating costs.The new tank system is expected to last six years.
Required:
a.Using incremental analysis,should they buy the new tank? Show calculations to support your answer.
b.Will the answer to (a)change if they can only sell the old tank for $5,000? Why or why not?

Accepted Answer

The answer of Doggy Day Park Inc.currently has a special...

Question 14

__________________________ costs are amounts that will continue even if a segment is eliminated.

Accepted Answer

The answer of __________________________ costs are amounts that will continue...

Question 15

A company has already incurred a $93,000 cost in partially producing its three products.Their selling prices when partially and fully processed are shown in the following table with the additional costs necessary to finish their processing.Based on this information,should any products be processed further?
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Product } & \begin{array} { c } 
\text { Unfinished } \
\text { Selling Price }
\end{array} & \begin{array} { c } 
\text { Finished } \
\text { Selling Price }
\end{array} & \begin{array} { c } 
\text { Further } \
\text { Processing } \
\text { Costs }
\end{array} \
\hline \text { A } & \$ 31.27 & \$ 62.37 & \$ 33.76 \
\hline \text { B } & 42.56 & 96.11 & 49.82 \
\hline \text { C } & 89.01 & 102.72 & 17.29 \
\hline
\end{array}$$

Accepted Answer

The answer of A company has already incurred a $93,000...

Question 16

An ________________________ requires a future outlay of cash and is relevant for current future decision making.

Accepted Answer

The answer of An ________________________ requires a future outlay of...

Question 17

A company expects its three departments to yield the following income for next year:
 $$\begin{array} { l r r r } 
& \text { Dept. O } & \text { Dept. K } & \text { Dept. W } \
\text { Sales } & \$ 92,000 & \$ 15,000 & \$ 87,000 \
\text { Expenses } & & & \
\text { Avoidable } & 73,000 & 1,000 &  3 6 , 0 0 0  \
\text { Unavoidable } &\underline{ 2,000 }& \underline{ 8 , 0 0 0 } & \underline{3 7 , 0 0 0 } \
\text { Total expenses } & \underline{75,000} & \underline{9,000 }& \underline{73,000} \
\text {Net income (loss)}& \mathbf { \underline{\$ 1 7 , 0 0 0 }} & \mathbf { \underline{\$ 6 , 0 0 0} } & \mathbf { \underline{\$ 1 4 , 0 0 0} }
\end{array}$$ 
Required: Compute the following independent calculations:
a.The effect on total company income if Dept.O is eliminated.
b.The effect on total company income if Dept.K is eliminated.
c.The effect on total company income if Dept.W is eliminated.

Accepted Answer

The answer of A company expects its three departments to...

Question 18

__________________________ costs are amounts the company would not incur if a segment was eliminated.

Accepted Answer

The answer of __________________________ costs are amounts the company would...

Question 19

Match between columns
                        Premises:  A cost that requires a current outlay of cash.
 The incremental revenue generated by selecting a particular course of action over another.
 An avoidable cost.
 A cost that cannot be avoided or changed in any way because it arises from a past decision; irrelevant to current and future decisions.
 An additional cost incurred only if a particular action is taken.
 The potential benefits of one alternative that are lost by choosing an alternative course of action.

Accepted Answer

The Answer of Incremental cost and Opportunity cost and Out-of-pocket is...

Question 20

Match between columns
                        Premises:  The production and nonproduction costs related to a given unit.
 Management sets sales price equal to the product’s total costs plus a desired markup on the product.
 A desired profit amount.
 Amounts a company would continue to incur even if the segment in question is eliminated.
 Worker morale, company image, and reputation.
 Amounts a company would not incur if the segment in question is eliminated.
 The combination of products sold by a company

Accepted Answer

The Answer of Sales mix and Avoidable costs and Qualitative is...

Quiz 23: Relevant Costing for Managerial Decisions

Impact on relationships with customers,company image,and employee morale are all examples of _________________________ decision factors.

A cost-plus method of determining a product's selling price adds a _________________________ to total product cost to reach a target price.

A _____________________ arises from a past decision and cannot be avoided or changed; it is irrelevant to future decisions.

Relevant costs are also known as ___________________.

In a constrained resource situation,a company should maximize contribution margin per _______________________________.

Costs already incurred in manufacturing the units of a product that do not meet quality standards are _________________________ costs.

An ______________________________ is the potential benefit lost by taking a specific action when two or more alternative choices are available.

A _______________________________ is the combination of products sold by a company.

In this chapter,you examined several short-term managerial decision tasks.Identify (list)any three of these types of decision tasks: _____________ _ _____________

__________________________ costs are amounts that will continue even if a segment is eliminated.

An ________________________ requires a future outlay of cash and is relevant for current future decision making.

__________________________ costs are amounts the company would not incur if a segment was eliminated.

Match the following definitions with the appropriate terms

Match the following definitions with the appropriate terms

Quiz 23: Relevant Costing for Managerial Decisions

Impact on relationships with customers,company image,and employee morale are all examples of _________________________ decision factors.

A cost-plus method of determining a product's selling price adds a _________________________ to total product cost to reach a target price.

A _____________________ arises from a past decision and cannot be avoided or changed; it is irrelevant to future decisions.

Relevant costs are also known as ___________________.

In a constrained resource situation,a company should maximize contribution margin per _______________________________.

Costs already incurred in manufacturing the units of a product that do not meet quality standards are _________________________ costs.

An ______________________________ is the potential benefit lost by taking a specific action when two or more alternative choices are available.

A _______________________________ is the combination of products sold by a company.

In this chapter,you examined several short-term managerial decision tasks.Identify (list)any three of these types of decision tasks: _________________________ _________________________ _________________________

__________________________ costs are amounts that will continue even if a segment is eliminated.

An ________________________ requires a future outlay of cash and is relevant for current future decision making.

__________________________ costs are amounts the company would not incur if a segment was eliminated.

Match the following definitions with the appropriate terms

Match the following definitions with the appropriate terms

In this chapter,you examined several short-term managerial decision tasks.Identify (list)any three of these types of decision tasks: _____________ _ _____________