Question

12) Cornerstone, Inc. has $125,000 of inventory that suffered minor smoke damage from a fire in the warehouse. The company can sell the goods "as is" for $45,000; alternatively, the goods can be cleaned and shipped to the firm's outlet center at a cost of $23,000. There the goods could be sold for $80,000. What alternative is more desirable and what is the relevant cost for that alternative?

A) Clean and ship to outlet center, $23,000.

B) Clean and ship to outlet center, $148,000.

C) Clean and ship to outlet center, $103,000.

D) Sell "as is," $125,000.

13) Allison is contemplating a job offer with an advertising agency where she will make $54,000 in her first year of employment. Alternatively, Allison can begin to work in her father's business where she will earn an annual salary of $38,000. If Allison decides to work with her father, the opportunity cost would be:

A) $54,000.

B) $38,000.

C) $92,000.

D) $0.

7) An accounting information system should be designed to provide information that is useful. To be useful the information must be:

A) qualitative rather than quantitative.

B) unique and unavailable through other sources.

C) historical in nature and not purport to predict the future.

D) relevant, accurate, and timely

Answer 1

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