Case Analysis 2.edited

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Faced with a long-run make-or-buy decision, the manager should do all of the following except: a. consider differences in the required capital investment and the timing of cash flows b. compare the cost of making the parts with the cost of buying them c. consider the quantity and quality of the parts as well as the technical know-how required d. use a cost study with only the differential costs and with no allocation of existing fixed overhead or profit

Which analysis involves a comparison of the cost of operating additional robotic tailors with additional revenues generated by increased product sales?

Which one of the following statement is not correct? O Both fixed and variable costs influence short-term decision-making. O Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action. O Opportunity costs are only considered when resources are limited. O Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs.

ABC systems get more accurate as more activities are identified and analyzed. Critique the following statement: “A company should look to break its production process into as many activities as possible in order to determine the most accurate unit costs possible”. Why do you agree or disagree with that statement? Give several reasons.

Pease help these are true/false questions.    ____     1.   Industries that typically use process cost systems include chemicals, oil, metals, paper, and pharmaceuticals.   ____     2.   The methods of evaluating capital investment proposals can be grouped into two general categories that can be referred to as (1) methods that ignore present value, and (2) present values methods.   ____     3.   Variable costs are costs that remain constant in total dollar amount as the level of activity changes.   ____     4.   As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.   ____     5.   Since the costs of producing an intermediate product do not change regardless of whether the intermediate product is sold or processed further, these costs are not considered in deciding whether to further process a product.

Which of the following costs are always incremental and relevant in decision analysis?       a)  Opportunity costs and sunk costs   b)  Avoidable costs and opportunity costs   c)  Only avoidable costs   d)  Avoidable costs and sunk costs   Which of the following will increase a company's breakeven point?       a)  reducing its total fixed costs   b)  increasing the selling price per unit   c)  increasing variable cost per unit   d)  increasing contribution margin per unit

In order to determine the optimal sales mix for a company, one should evaluate the contribution margin per unit of whatever the scarce resource is   True or Faise

1.Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity? Group of answer choices Net income will increase if the special sales price per unit exceeds the unit variable costs. Net income will not be affected. Additional fixed costs will probably be incurred. Net income will decrease.

____     1.   Industries that typically use process cost systems include chemicals, oil, metals, paper, and pharmaceuticals.   ____     2.   The methods of evaluating capital investment proposals can be grouped into two general categories that can be referred to as (1) methods that ignore present value, and (2) present values methods.   ____     3.   Variable costs are costs that remain constant in total dollar amount as the level of activity changes.   ____     4.   As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.   ____     5.   Since the costs of producing an intermediate product do not change regardless of whether the intermediate product is sold or processed further, these costs are not considered in deciding whether to further process a product.

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Least-Squares Regression; Scattergraph; Comparison of Activity Bases The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The company’s cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information: Required: 1. Using tons mined as the independent variable, prepare a scattergraph that plots tons mined on the horizontal axis and utilities cast on the vertical axis. Using the least-squares regression method, estimate the variable utilities cost per ton mined and the total fixed utilities cost per quarter. Express these estimates in the form Y = a + bX. 2. Using direct…

1. Compute the annual net cost savings promised by the automated welding machine. 2a. Using the data from (1) above and other data from the problem, compute the automated welding machine’s net present value. 2b. Would you recommend purchasing the automated welding machine? 3. Assume that management can identify several intangible benefits associated with the automated welding machine, including greater flexibility in shifting from one type of product to another, improved quality of output, and faster delivery as a result of reduced throughput time. What minimum dollar value per year would management have to attach to these intangible benefits in order to make the new welding machine an acceptable investment?