Reference no: EM132796214

Questions -

Q1. Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $31 per pound and costs $27 per pound to produce. Product C would sell for $58 per pound and would require an additional cost of $25 per pound to produce. The differential cost of producing Product C is

a. $58 per pound

b. $31 per pound

c. $25 per pound

d. $27 per pound

Q2. Operating income for Division H is $220,000, and operating income before support department allocations is $975,000. As a result,

a. direct materials, direct labor, and factory overhead total $565,000

b. total manufacturing expenses are $565,000

c. total support department allocations are $755,000

d. total operating expenses are $565,000

Q3. Blaser Corporation had $1,078,000 in invested assets, sales of $1,294,000, operating income amounting to $214,000 , and a desired minimum return on investment of 12%. The return on investment for Blaser Corporation is

a. 13.2%

b. 16.5%

c. 23.8%

d. 19.9%

Q4. Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $23.55 per pound and costs $16.65 per pound to produce. Product D would sell for $41.65 per pound and would require an additional cost of $9.60 per pound to produce.

The differential cost of producing Product D is

a. $11.52 per pound

b. $5.76 per pound

c. $7.68 per pound

d. $9.60 per pound

Q5. Jarrett Company is considering a cash outlay of $300,000 for the purchase of land, which it could lease for $36,000 per year. If alternative investments are available that yield a 9% return, the opportunity cost of the purchase of the land is

a. $72,000

b. $9,000

c. $27,000

d. $36,000

Q6. Mason Corporation had $1,039,000 in invested assets, sales of $1,211,000, operating income amounting to $234,000, and a desired minimum return on investment of 15%. The profit margin for Mason Corporation is

a. 15.0%

b. 19.3%

c. 22.5%

d. 85.8%

Q7. Two divisions of Oregano Company (Divisions TX and OY) have the same profit margins. Division TX's investment turnover is larger than that of Division OY (1.2 to 1.0). Operating income for Division TX is $55,000, and operating income for Division OY is $43,000. Division TX has a higher return on investment than Division OY by

a. comparing the profit margins

b. using its assets more efficiently in generating sales

c. applying a negotiated price measure

d. using operating income as a performance measure