08 Dec Contribution Margin; Sunk, Average, Incremental an
Contribution Margin; Sunk, Average, Incremental and Fixed Costs; Joint Products36 A decision to discontinue a given product on the basis of contribution margin data should include consideration of the probable impact of the discontinuance on the sales of other productsa Trueb False37 Which of the following types of cost is always relevant to a decision?a Sunk costsb Average costsc Incremental costsd Fixed costs 38 Which is an example of joint products?a Sugar and beefb Pens and erasersc Granulated coal and methyl alcohold Iron and plastic39 Accepting a special order is profitable whenever the revenue from the special order exceeds:a The average unit cost of production multiplied by the number ofunits in the orderb The incremental cost of producing the orderc The materials and direct labor costs of producing the orderd The fixed manufacturing costs for the period 40 Computer City manufactured 100 personal computers at a cost of $65,000 It can sell them as is for $100,000 or install hard disks in them and sell them for $140,000 The $65,000 original manufacturing cost is:a An out-of-pocket cost because it has already been paidb A sunk cost because it is not relevant to the decisionc An incremental cost because it is relevant to the decisiond A fixed cost because it will remain the same no matter whichaction is taken41 Products for which sales of one contribute to the sales of another are called:a Complementary productsb Competing productsc Contributory productsd Codependent products
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