29 Jun Question Week 6 – Chapter 7 Pre- Quiz Study 15 QUESTIONS
Question
Week 6 – Chapter 7 Pre- Quiz Study 15 QUESTIONS
Question 1
Which of the following stages of the management decision-making process is improperly sequenced?
Evaluate possible courses of action ? Make decision.
Assign responsibility for the decision ? Identify the problem.
Identify the problem ? Determine possible courses of action.
Assign responsibility for decision ? Determine possible courses of action.
Question 2
A segment has the following data:
Sales $700,000
Variable expenses 300,000
Fixed expenses 550,000
What will be the incremental effect on net income if this segment is eliminated, assuming the fixed expenses will be allocated to profitable segments?
$400,000 decrease
cannot be determined from the data provided
$5,000 decrease
$400,000 increase
Question 3
New Age Makeup produces face cream. Each bottle of face cream costs $10 to produce and can be sold for $13. The bottles can be sold as is, or processed further into sunscreen at a cost of $14 each. New Age Makeup could sell the sunscreen bottles for $23 each.
Face cream must be processed further because its profit is $9 each.
Face cream must not be processed further because costs increase more than revenue.
Face cream must not be processed further because it decreases profit by $1 each.
Face cream must be processed further because it increases profit by $3 each.
Question 4
A company decided to replace an old machine with a new machine. Which of the following is considered a relevant cost?
The book value of the old equipment
Depreciation expense of the old equipment
The current disposal price of the old equipment
The loss on disposal of the old equipment
Question 5
Incremental analysis would not be appropriate for:
analysis of manufacturing variances.
elimination of an unprofitable segment.
an allocation of limited resource decision.
a make or buy decision.
Question 6
Sandusky Inc. has the following costs when producing 100,000 units:
Variable costs $600,000
Fixed costs 900,000
An outside supplier is interested in producing the item for Sandusky. If the item is produced outside, Sandusky could use the released production facilities to make another item that would generate $150,000 of net income. At what unit price would Sandusky accept the outside supplier’s offer if Sandusky wanted to increase net income by $120,000?
$5.70
$6.30
$8.70
$7.50
Question 7
Book value of old equipment is considered to be a
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