Question

Please answer all the question!!!

5. When will the elimination overall profit? a. When the b. When th of a product line have no effect on the company's avoidable fixed costs equal the product line's contribution margin e unavoidable fixed costs equal the product line's contribution margin d when there are no fixed costs incurred by the product line d. When the product line contribution margi n is negative 6. All of the following are relevant to the sell or process further decision except Costs incurred beyond the split-off point Revenues at the split-off point Costs incurred before the split-off point Revenues beyond the split-off point a. b. c. d. 7. Which of the following is NOT a qualitative factor to be considered in a make-or- buy decision? a. Possible lost jobs from buying outside b. Supplier's ability to satisfy quality standards c. Incremental benefit from buying outside d. Supplier's ability to meet production schedule 8. A company is contemplating the acceptance of a special order. The order would not affect regular sales and could be filled without exceeding plant capacity. However, a new stamping machine would have to be purchased in order to stamp the customer's name on the product. Which of the following is likely? Total variable costs will be irrelevant. a. b. Only variable costs will be relevant. c. Only fixed costs will be relevant. Both variable and fixed costs will be relevant. d. Which of the following terms are synonymous? Avoidable costs and irrelevant costs 9. a. Unavoidable costs and incremental costs b. Sunk costs and relevant costs c. Joint costs and sunk costs d.

Answer 1

5. A is correct. Avoidable cost is that is not incurred if activity not performed.

6.C is correct. It is also called post separation cost and easily identify the individual product. But joint cost need to be appointed. When joint product become separately and it can be a either sold or separately further processed.

7. C. Is correct, incrementLi benefits from buying outside.

8. D both variable and fixed cost will be relevant.

9. D, joint cost are the sunk cost at the split of point