Question

32.      When producing joint products, what are the relevant costs for a decision to sell or process further?

a.	Joint costs
b.	Costs incurred before the splitoff point
c.	Costs incurred at the splitoff point
d.	Costs incurred after the splitoff point.

33.      Which of the following describes the cost of maintaining warehouse facilities?

a.	carrying costs.
b.	set-up costs.
c.	order costs.
d.	sunk costs.

34.      Which of the following is a method of managing purchasing, production, and sales, by which the firm attempts to time purchases so that items arrive just in time for sale or production?

a.	total quality management.
b.	flexible manufacturing practices.
c.	just-in-time inventory.
d.	theory of constraints.

35.      In making long-term decisions about investing and financing, a firm should do which of the following?

a.	decide whether to make the investment, then decide how to raise the funds required for the investment.
b.	decide how to raise the funds required for the investment, then decide whether to make the investment.
c.	decide how to raise the funds required for the investment at the same time as deciding whether to make the investment.
d.	None of the above.

36.      A not-for-profit company purchased an asset at a cost of $60,000. Annual operating cash flows are expected to be $20,000 each year for 4 years. At the end of the asset life, there will be no residual (salvage) value. Ignore income taxes. What is the net present value if the cost of capital is 10 percent?

a.	$(1,960.)
b.	$3,397.
c.	$12,400.
d.	$23,400.

Answer 1

		Explanation
32	D. Costs incurred after the splitoff point.	Relevant cost, in managerial accounting, refers to the incremental and avoidable cost of implementing a business decision
33	A. Carrying costs	Carrying costs or holding cost refers to the total cost of holding inventory.. It includes the cost of maintaining warehouse facilities
34	C. Just-in-time inventory.	It is a strategy to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.
35	A. decide whether to make the investment, then decide how to raise the funds required for the investment.
36	B. $3,397	NPV(10%,20000,20000,20000,20000,0)-60000 = 3397