Download For more course tutorials visit www.uophelp.com 1.Question : (TCO

ACCT 505 Week 6 Quiz Segment Reporting and Relevant Costs
for Decisions (Devry)
Click Here to Buy the Tutorial
http://www.uophelp.com/ACCT-505--%28Devry%29/product9092-ACCT-505-Week-6-Quiz-Segment-Reporting-andRelevant-Costs-for-Decisions-%28Devry%29
For more course tutorials visit
www.uophelp.com
1.Question :
(TCO D) Return on investment (ROI) is equal to the margin multiplied
by
2.Question :
(TCO D) For which of the following decisions are opportunity costs
relevant?
The decision to make or buy a needed part
The desision to keep or drop a product line
(A)
Yes
Yes
(B)
Yes
No
(C)
No
Yes
(D)
No
No
3.Question :
(TCO D) Last year, the House of Orange had sales of $826,650, net
operating income of $81,000, and operating assets of $84,000 at the
beginning of the year and $90,000 at the end of the year. What was the
company's turnover, rounded to the nearest tenth?
1.Question :
(TCO D) Data for December concerning Dinnocenzo Corporation's two
major business segments-Fibers and Feedstocks-appear below:
Sales revenues, Fibers
$870,000
Sales revenues, Feedstocks
$820,000
Variable expenses, Fibers
$426,000
Variable expenses, Feedstocks
$344,000
Traceable fixed expenses, Fibers
$148,000
Traceable fixed expenses, Feedstocks
S156,000
Common fixed expenses totaled $314,000 and were allocated as follows:
$129,000 to the Fibers business segment and $185,000 to the Feedstocks
business segment.
Required:
Prepare a segmented income statement in the contribution format for the
company. Omit percentages; show only dollar amounts.
2.Question :
(TCO D) Wryski Corporation had net operating income of $150,000 and
average operating assets of $500,000. The company requires a return on
investment of 19%.
Required:
i. Calculate the company's current return on investment and residual
income.
ii. The company is investigating an investment of $400,000 in a project
that will generate annual net operating income of $78,000. What is the
ROI of the project? What is the residual income of the project? Should
the company invest in this project?
3.Question :
(TCO D) Tjelmeland Corporation is considering dropping product
S85U. Data from the company's accounting system appear below.
Sales
$360,000
Variable Expenses
$158,000
Fixed Manufacturing Expenses
$119,000
Fixed Selling and Administrative Expenses
$94,000
All fixed expenses of the company are fully allocated to products in the
company's accounting system. Further investigation has revealed that
$55,000 of the fixed manufacturing expenses and $71,000 of the fixed
selling and administrative expenses are avoidable if product S85U is
discontinued.
Required:
i. According to the company's accounting system, what is the net
operating income earned by product S85U? Show your work!
ii. What would be the effect on the company's overall net operating
income of dropping product S85U? Should the product be dropped?
Show your work!
4.Question :
(TCO D) Fouch Company makes 30,000 units per year of a part it uses
in the products it manufactures. The unit product cost of this part is
computed as follows.
Direct Materials
$15.70
Direct Labor
$17.50
Variable Manufacturing Overhead
$4.50
Fixed Manufacturing Overhead
$14.60
Unit Product Cost
$52.30
An outside supplier has offered to sell the company all of these parts it
needs for $51.90 a unit. If the company accepts this offer, the facilities
now being used to make the part could be used to make more units of a
product that is in high demand. The additional contribution margin on
this other product would be $219,000 per year.
If the part were purchased from the outside supplier, all of the direct
labor cost of the part would be avoided. However, $6.20 of the fixed
manufacturing overhead cost being applied to the part would continue
even if the part were purchased from the outside supplier. This fixed
manufacturing overhead cost would be applied to the company's
remaining products.
Required:
i. How much of the unit product cost of $52.30 is relevant in the
decision of whether to make or buy the part?
ii. What is the net total dollar advantage (disadvantage) of purchasing
the part rather than making it?
iii. What is the maximum amount the company should be willing to pay
an outside supplier per unit for the part if the supplier commits to
supplying all 30,000 units required each year?
5.Question :
(TCO D) Biello Co. manufactures and sells medals for winners of
athletic and other events. Its manufacturing plant has the capacity to
produce 15,000 medals each month; current monthly production is
14,250 medals. The company normally charges $115 per medal. Cost
data for the current level of production are shown below.
Variable Costs
Direct Materials
$969,000
Direct Labor
$270,750
Selling and Administrative
$270,075
Fixed Costs
Manufacturing
$370,550
Selling and Administrative
$89,775
The company has just received a special one-time order for 600 medals
at $102 each. For this particular order, no variable selling and
administrative costs would be incurred. This order would also have no
effect on fixed costs.
Required:
Should the company accept this special order? Why?