Question

1.Using the information below, compute the cycle efficiency:

Process time	6.0		hours
Inspections time	.5		hours
Move time	.6		hours
Wait time	.9		hours
Warehouse storage time	72.0		hours

Multiple Choice

• 93.8%.

• 81.3%.

• 100.0%.

• 75.0%.

• 88.8%.

2. When the selling division in an internal transfer has unsatisfied demand from outside customers for the product that is being transferred, then the lowest acceptable transfer price as far as the selling division is concerned is:

Multiple Choice

• variable cost of producing a unit of product.

• the full absorption cost of producing a unit of product.

• the market price charged to outside customers, less costs saved by transferring internally.

• the amount that the purchasing division would have to pay an outside seller to acquire a similar product for its use.

• all the costs of producing a unit of product.

3.Calculating return on investment for an investment center is defined by the following formula:

Multiple Choice

• Contribution margin/Ending assets.

• Gross profit/Ending assets.

• Net income/Ending assets.

• Income/Average invested assets.

• Contribution margin/Average invested assets.

4. A unit of a business that generates revenues and incurs costs is called a:

Multiple Choice

• Performance center.

• Profit center.

• Cost center.

• Responsibility center.

• Expense center.

5. A unit of a business that generates revenues and incurs costs is called a:

Multiple Choice

• Performance center.

• Profit center.

• Cost center.

• Responsibility center.

• Expense center.

6. Part AR3 costs the Southwestern Division of Luxon Corporation $26 to make-direct materials are $10, direct labor is $4, variable manufacturing overhead is $9, and fixed manufacturing overhead is $3. Southwestern Division sells Part AR3 to other companies for $30. The Northeastern Division of Luxon Corporation can use Part AR3 in one of its products. The Southwestern Division has enough idle capacity to produce all of the units of Part AR3 that the Northeastern Division would require. What is the lowest transfer price at which the Southwestern Division should be willing to sell Part AR3 to the Northeastern Division?

Multiple Choice

• $30

• $26

• $23

• $27

• $21

7.

Chang Industries has 2,000 defective units of product that have already cost $14 each to produce. A salvage company will purchase the defective units as they are for $5 each. Chang's production manager reports that the defects can be corrected for $6 per unit, enabling them to be sold at their regular market price of $21. The incremental income or loss on reworking the units is:

Multiple Choice

• $20,000 loss.

• $20,000 income.

• $12,000 loss.

• $32,000 income.

• $30,000 income.

8.

MC Qu. 43 An additional cost incurred only if a compan...

An additional cost incurred only if a company pursues a particular course of action is a(n):

Multiple Choice

• Period cost.

• Pocket cost.

• Discount cost.

• Incremental cost.

• Sunk cost.

Answer 1