Question

In: Accounting

30. Which type of manager would be allowed to decide whether or not new manufacturing equipment...

30. Which type of manager would be allowed to decide whether or not new manufacturing equipment should be purchased?

a. Production manager

b. Cost center manager

c. Profit center manager

d. Investment center manager

15. In the decision-making process, which of the following tactical decision making situations would be best addressed by managers using a segmented income statement rather than a contribution margin format income statement?

a.

The decision on whether or not a one-time special order for a customer should be accepted.

b.

The calculation of the break-even point for the upcoming month.

c.

The decision on whether or not an entire product line should be discontinued.

d.

The decision on whether or not to process a product further or sell "as is".

12. Under direct costing, which of the following are costs that can be inventoried (i.e., product costs)?

a.

variable selling and administrative expense

b.

variable manufacturing overhead

c.

fixed manufacturing overhead

d.

fixed selling and administrative expense

Solutions

Expert Solution

30. The answer is option d.

Explanation: Its investment centre manager's responsibilty to take decisions regarding Investment opportunites and return expected from such investments.

15. The answer is option a.

Explanation: Because whether or not to accept one time special order from a customer is depends upon production capacity of the company, segment income statement can give accurate information regarding production capacity of each segment of the company.

12.The answer is option b.

Explanation: Direct costing is also called as variable costing , In variable costing all fixed costs are considered as period costs and not a product cost. and all selling and administration costs are also considered as period costs.Therefore direct material , direct labor and variable manufacturing costs are considered as product costs.

Please upvote if found the answer useful.

For any clarification feel free to reach at comment section.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

The ICan’tBelieveWhat’sHappening Company needs to decide whether or not to purchase a new piece of equipment....
The ICan’tBelieveWhat’sHappening Company needs to decide whether or not to purchase a new piece of equipment. The equipment costs $5.2 million (payable now). The equipment will provide before-tax cash inflows of $2.0 million a year at the end of each of the next four years. The equipment would be categorized as a 3-year tax class asset according to the MACRS system. Therefore use the following depreciation rates: 33%, 45%, 15%, and 7%, for each year respectively from year 1 through...
The ICan’tBelieveWhat’sHappening Company needs to decide whether or not to purchase a new piece of equipment....
The ICan’tBelieveWhat’sHappening Company needs to decide whether or not to purchase a new piece of equipment. The equipment costs $5.2 million (payable now). The equipment will provide before-tax cash inflows of $2.0 million a year at the end of each of the next four years. The equipment would be categorized as a 3-year tax class asset according to the MACRS system. Therefore use the following depreciation rates: 33%, 45%, 15%, and 7%, for each year respectively from year 1 through...
A computer manufacturing company is trying to decide whether to purchase specialized assembly equipment today or...
A computer manufacturing company is trying to decide whether to purchase specialized assembly equipment today or to wait 5 years from now, when the equipment will be first needed. If you were to purchase the equipment today it would cost: $403,000 5 years from now the equipment would cost: $634,738 The bank is paying 9.00% interest per year, compounded monthly. Should you buy the equipment now or wait 5 years to buy the equipment?
The Hyatt Company is trying to decide whether it should purchase new equipment and continue to...
The Hyatt Company is trying to decide whether it should purchase new equipment and continue to make its subassemblies internally or if production should be discontinued and the subassembly purchased from an outside supplier. Either way production cannot continue using the current equipment.                         New equipment for producing the subassemblies can be purchased at a cost of $400,000. The equipment would have a five-year useful life (the company uses straight-line depreciation) and a $50,000 salvage value.                         Alternatively,...
A firm plans to begin production of a new small appliance. The manager must decide whether...
A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor for $7.30 each or to produce them in house. There are two in house options. Option 1 would have an annual fixed cost of $160000 and a variable cost of $5.30. Option 2 would have an annual fixed cost of $191000 and a variable cost of $3.90. Calculate the maximum quantity that would have...
The See Thru Windows Ltd. is trying to decide whether it should purchase new equipment and...
The See Thru Windows Ltd. is trying to decide whether it should purchase new equipment and continue to make its subassemblies internally or if production should be discontinued and the subassembly purchased from an outside supplier. New equipment for producing the subassemblies can be purchased at a cost of $400,000. The equipment would have a five-year useful life (the company uses straight-line depreciation) and a $50,000 salvage value. Alternatively, the subassemblies could be purchased from an outside supplier. The supplier...
Precision Tool is trying to decide whether to lease or buy some new equipment for its...
Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment costs $50,000, has a 3-year life and will be worthless after the 3 years. The pre-tax cost of borrowed funds is 9 percent and the tax rate is 34 percent. The equipment can be leased for $17,500 a year. What is the net advantage to leasing? When calculation this with Excel I keep getting the wrong answer can...
Precision Tool is trying to decide whether to lease or buy some new equipment for its...
Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment costs $51,000, has a 3-year life and will be worthless after the 3 years. The pre-tax cost of borrowed funds is 7 percent and the tax rate is 35 percent. The equipment can be leased for $16,000 a year. What is the net advantage to leasing? (Do not round intermediate calculations.) a. $4,831 b. $6,451 c. $6,097 d....
Precision Tool is trying to decide whether to lease or buy some new equipment for its...
Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment costs $55,000, has a 3-year life and will be worthless after the 3 years. The pre-tax cost of borrowed funds is 6 percent and the tax rate is 33 percent. The equipment can be leased for $17,500 a year. What is the net advantage to leasing?
A manager must decide which type of machine to buy, A, B, or C. Machine costs...
A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine Cost A $ 60,000 B $ 50,000 C $ 60,000 Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product Annual Demand Product Annual Demand Processing time per unti (minutes)    A B C 1 25,000 1 1 5 2 14,000 1 6 3 3   20,000 1 3 4 4 6,000...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT