Are the materials costs and processing costs relevant in the choice between alternatives A and B?
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71. Are the materials costs and
processing costs relevant in the choice between alternatives A and B? (Ignore
the equipment rental and occupancy costs in this question.)
A) Both materials costs and processing costs
are relevant
B) Neither materials costs nor processing
costs are relevant
C) Only processing costs are relevant
D) Only materials costs are relevant
72. What is the differential cost of Alternative B
over Alternative A, including all of the relevant costs?
A) $105,000
B) $23,000
C) $128,000
D) $116,500
73. Are the materials costs and processing costs
relevant in the choice between alternatives X and Y? (Ignore the equipment
rental and occupancy costs in this question.)
A) Neither materials costs nor processing
costs are relevant
B) Only processing costs are relevant
C) Only materials costs are relevant
D) Both materials costs and processing costs
are relevant
74. What is the differential cost of Alternative Y
over Alternative X, including all of the relevant costs?
A) $132,000
B) $119,000
C) $145,000
D) $26,000
75. Under the given conditions, the change in
annual operating income from discontinuing the production and sale of Doombugs
would be:
A) $30,000 decrease
B) $10,000 increase
C) $22,000 decrease
D) $18,000 increase
76. Assuming all other conditions stay the same,
at what level of annual sales of Doombugs (in units) should Draper be
indifferent to discontinuing Doombugs or continuing the production and sale of
Doombugs?
A) 20,000 units
B) 18,000 units
C) 6,000 units
D) 4,000 units
77. Suppose that if the Doombug toy is dropped,
the production and sale of other Draper toys would increase so as to generate a
$16,000 increase in the contribution margin received from these other toys. If
all other conditions are the same, the change in annual operating income from
discontinuing the production and sale of Doombugs would be:
A) $6,000 decrease
B) $14,000 increase
C) $2,000 decrease
D) $28,000 increase
78. Suppose again that if the Doombug toy is
dropped, the production and sale of other Draper toys would increase so as to
generate a $16,000 increase in the contribution margin received from these
other toys. At what selling price per Doombug should Draper be indifferent (on
economic grounds) between dropping the Doombug or continuing its production and
sale? (All other conditions remain the same, including annual sales of 15,000
units of the Doombug toy.)
A) $8.33
B) $9.25
C) $9.60
D) $10.70
79. According to the company’s accounting system,
what is the net operating income earned by product D74F?
A) ($58,000)
B) ($440,000)
C) $58,000
D) $440,000
80. What would be the effect on the company’s
overall net operating income if product D74F were dropped?
A) Overall net operating income would
increase by $226,000.
B) Overall net operating income would
increase by $58,000.
C) Overall net operating income would
decrease by $226,000.
D) Overall net operating income would
decrease by $58,000.
71. Are the materials costs and
processing costs relevant in the choice between alternatives A and B? (Ignore
the equipment rental and occupancy costs in this question.) A) Both materials costs and processing costs
are relevant B) Neither materials costs nor processing
costs are relevant C) Only processing costs are relevant D) Only materials costs are relevant 72. What is the differential cost of Alternative B
over Alternative A, including all of the relevant costs? A) $105,000 B) $23,000 C) $128,000 D) $116,500 73. Are the materials costs and processing costs
relevant in the choice between alternatives X and Y? (Ignore the equipment
rental and occupancy costs in this question.) A) Neither materials costs nor processing
costs are relevant B) Only processing costs are relevant C) Only materials costs are relevant D) Both materials costs and processing costs
are relevant 74. What is the differential cost of Alternative Y
over Alternative X, including all of the relevant costs? A) $132,000 B) $119,000 C) $145,000 D) $26,000 75. Under the given conditions, the change in
annual operating income from discontinuing the production and sale of Doombugs
would be: A) $30,000 decrease B) $10,000 increase C) $22,000 decrease D) $18,000 increase 76. Assuming all other conditions stay the same,
at what level of annual sales of Doombugs (in units) should Draper be
indifferent to discontinuing Doombugs or continuing the production and sale of
Doombugs? A) 20,000 units B) 18,000 units C) 6,000 units D) 4,000 units 77. Suppose that if the Doombug toy is dropped,
the production and sale of other Draper toys would increase so as to generate a
$16,000 increase in the contribution margin received from these other toys. If
all other conditions are the same, the change in annual operating income from
discontinuing the production and sale of Doombugs would be: A) $6,000 decrease B) $14,000 increase C) $2,000 decrease D) $28,000 increase 78. Suppose again that if the Doombug toy is
dropped, the production and sale of other Draper toys would increase so as to
generate a $16,000 increase in the contribution margin received from these
other toys. At what selling price per Doombug should Draper be indifferent (on
economic grounds) between dropping the Doombug or continuing its production and
sale? (All other conditions remain the same, including annual sales of 15,000
units of the Doombug toy.) A) $8.33 B) $9.25 C) $9.60 D) $10.70 79. According to the company’s accounting system,
what is the net operating income earned by product D74F? A) ($58,000) B) ($440,000) C) $58,000 D) $440,000 80. What would be the effect on the company’s
overall net operating income if product D74F were dropped? A) Overall net operating income would
increase by $226,000. B) Overall net operating income would
increase by $58,000. C) Overall net operating income would
decrease by $226,000. D) Overall net operating income would
decrease by $58,000.
