ACC/561 ACC 561 Week 6 WileyPLUS Practice Quiz

Description / Instructions: Complete the Week 6 WileyPLUS Practice Quiz.

Question 1

A major accounting contribution to the managerial decision-making process in evaluating possible courses of action is to

provide relevant revenue and cost data about each course of action.

decide which actions that management should consider.

determine the amount of money that should be spent on a project.

assign responsibility for the decision.

Question 2

In incremental analysis,

only costs are analyzed.

only revenues are analyzed.

both costs and revenues may be analyzed.

both costs and revenues that stay the same between alternate courses of action will be analyzed.

Question 3

Incremental analysis is most useful

in developing relevant information for management decisions.

in evaluating the master budget.

as a replacement technique for variance analysis.

in choosing between the net present value method and the internal rate of return method.

Question 4

It costs Ross Co. $24 of variable and $10 of fixed costs to produce one bathroom scale which normally sells for $70. A foreign wholesaler offers to purchase 2,000 scales at $30 each. Ross would incur special shipping costs of $2 per scale if the order were accepted. Ross has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?

$12,000 decrease

$60,000 increase

$8,000 increase

$8,000 decrease

Question 5

Carter, Inc. can make 100 units of a necessary component part with the following costs:

Direct Materials	$120,000
Direct Labor	20,000
Variable Overhead	60,000
Fixed Overhead	40,000

If Carter purchases the component externally, $30,000 of the fixed costs can be avoided. At what external price for the 100 units is the company indifferent between making or buying?

$240,000

$170,000

$230,000

$200,000

Question 6

Mink Manufacturing is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $60 and Mink would sell it for $130. The cost to assemble the product is estimated at $42 per unit and the company believes the market would support a price of $170 on the assembled unit. What decision should Mink make?

Sell before assembly, the company will be better off by $40 per unit.

Process further, the company will be better off by $58 per unit.

Process further, the company will be better off by $28 per unit.

Sell before assembly, the company will be better off by $2 per unit.

Question 7

A company decided to replace an old machine with a new machine. Which of the following is considered a relevant cost?

The loss on the disposal of the old equipment

The current disposal price of the old equipment

The book value of the old equipment

Depreciation expense on the old equipment

12 years ago

Report issue

ACC561 Week 6 Wilyplus Practice Quiz Answers / (score: 7/7)

NOT RATED

Purchase the answer to view it

week_6_wilyplus_practice_quiz_answers.doc