Listed are seven technical accounting terms introduced or emphasized. Sunk cost Opportunity cost Out-of-pocket cost Joint products Incremental analysis Split-off point Relevant information Each of the following statements may (or may not) describe one of these terms. For each statement, indicate the accounting term or terms described, or answer “none" if the statement does not correctly describe any of these terms. Examination of differences between costs to be incurred and revenue to be earned under different courses of a. action. b. A cost incurred in the past that cannot be changed as a result of future actions. c. Costs and revenue that are expected to vary, depending on the course of action decided on. d. The benefit foregone by not pursuing an alternative course of action. e. Products made from common raw materials and shared production processes, f. A cost yet to be incurred that will require future payment and may vary among alternative courses of action. g. The point at which manufacturing costs are split equally between ending inventory and cost of goods sold.
Listed are seven technical accounting terms introduced or emphasized. Sunk cost Opportunity cost Out-of-pocket cost Joint products Incremental analysis Split-off point Relevant information Each of the following statements may (or may not) describe one of these terms. For each statement, indicate the accounting term or terms described, or answer “none" if the statement does not correctly describe any of these terms. Examination of differences between costs to be incurred and revenue to be earned under different courses of a. action. b. A cost incurred in the past that cannot be changed as a result of future actions. c. Costs and revenue that are expected to vary, depending on the course of action decided on. d. The benefit foregone by not pursuing an alternative course of action. e. Products made from common raw materials and shared production processes, f. A cost yet to be incurred that will require future payment and may vary among alternative courses of action. g. The point at which manufacturing costs are split equally between ending inventory and cost of goods sold.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Unit 3 Assignment i
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Listed are seven technical accounting terms introduced or emphasized.
Opportunity cost
Out-of-pocket cost
Joint products
Incremental analysis
Sunk cost
Split-off point
Relevant information
Each of the following statements may (or may not) describe one of these terms. For each statement, indicate the accounting term or
terms described, or answer “none" if the statement does not correctly describe any of these terms.
Ask
Examination of differences between costs to be incurred and revenue to be earned under different courses of
a.
action.
b. A cost incurred in the past that cannot be changed as a result of future actions.
c. Costs and revenue that are expected to vary, depending on the course of action decided on.
d. The benefit foregone by not pursuing an alternative course of action.
e. Products made from common raw materials and shared production processes.
f. A cost yet to be incurred that will require future payment and may vary among alternative courses of action.
g. The point at which manufacturing costs are split equally between ending inventory and cost of goods sold.
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Graw
Hill
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Transcribed Image Text:1
Gunst Company produces three video games: Android, Bio-Mutant, and Cyclops. Cost and revenue data pertaining to each product
are as follows.
Bio-
Android
Cyclops
Mutant
Selling price
Direct labor
Direct materials
Variable overhead
$100
$ 60
$125
48
24
60
Ask
6.
16
9.
At the present time, demand for each of the company's products far exceeds its capacity to produce them. Thus, management is trying
to determine which of its games to concentrate on next week in filling its backlog of orders. Gunst's direct labor rate is $12 per hour,
and only 1,000 hours of direct labor are available each week.
Determine the maximum total contribution margin the company can make by its best use of the 1,000 available hours.
Total contribution margin
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