MBA 524 Managerial Accounting 33. Projected revenue Alternative A Alternative B $50,000 $60,000 Direct material 6,000 12,000 Assembly labor 9,000 9,000 Production supervisor's salary 10,000 10,000 Facility-related costs 10,000 15,000 Profit $15,000 $14,000 Lego Builders, Inc. is trying to decide between the following two alternatives. Which of the following conclusions can be drawn from the chart above? Variable costs are always relevant for decision making. ○ Fixed costs are sunk and thus are never relevant for decision making. Relevant costs may include variable costs and fixed costs. ○ None of the above. sugar, and other raw materials $250,000

MBA 524 Managerial Accounting 33. Projected revenue Alternative A Alternative B $50,000 $60,000 Direct material 6,000 12,000 Assembly labor 9,000 9,000 Production supervisor's salary 10,000 10,000 Facility-related costs 10,000 15,000 Profit $15,000 $14,000 Lego Builders, Inc. is trying to decide between the following two alternatives. Which of the following conclusions can be drawn from the chart above? Variable costs are always relevant for decision making. ○ Fixed costs are sunk and thus are never relevant for decision making. Relevant costs may include variable costs and fixed costs. ○ None of the above. sugar, and other raw materials $250,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter1: Introduction To Cost Management

Section: Chapter Questions

Problem 6E: Each of the following scenarios requires the use of accounting information to carry out one or more...

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7. Responsibility Accounting: a. What is a cost center? Give an example of a cost center b. What is a Profit center? Give an example of a profit center c. What is an investment center? Give an example of an investment center d. What is management by exception: e. The Hydride Division of Murdoch Corporation is an investment center. It has $1,000,000 of operating assets. During 2022, the Hydride Division earned operating income of $400,000 on $5,000,000 of sales. Murdoch's companywide return on investment or desired rate of return is approximately 20% SHOW WORK FOR CREDIT! 1. What is the ROI? 2. What is the margin? 3. What is the turnover? 4. What is the residual income?
Compute the Revenue Effect- Growth Component, indicate if favorable/(unfavorable). *The activity driver for conversion cost is the direct labor hours. Compute the Cost Effect- Price Recovery Component indicate if favorable/(unfavorable). *The activity driver for conversion cost is the direct labor hours.
The following data relate to Department no. 3 of Tsing Corporation: Segment contribution margin 540,000 Profit margin controllable by segment manager 310000 Segment profit margin 150000 On the basis of this information, Department no. 3's variable operating expenses are: Select one: a. $80,000. b. $160,000. c. $230,000. d. $390,000. e. not determinable.
Use the following information to answer #7 and # 8 An investment banker is analyzing two companies as possible investments, but is concerned about the impact that each company's cost structure might have on its profitability. The following CVP income statements are available for Chantal Corp. and Mantle, Inc. Chantal Corp. Mantle, Inc. Sales revenue $700,000 $700,000 Variable costs 350,000 487,500 Contribution margin 350,000 212,500 Fixed costs 225.000 87,500 Net income $125,000 $125.000 If sales decrease by 20% for each company, the impact on net income will be: a decrease of 10% for Chantal and a decrease of 14% for Mantle. O a decrease of 20% for Chantal and a decrease of 20% for Mantle. O a decrease of 56% for Chantal and a decrease of 34% for Mantle. O a decrease of 56% for Chantal and a decrease of 78% for Mantle.
Direct fixed cost controllable by of the period just ended: Contribution margin Period expenses: Manager's salary Depreciation expense Allocated administrative costs25.000 Profit center #1 income Of the foregoing, in all likelihood, Mr. Iglesias controls P350.000 P100,000 40,000 165,000 P185.000 C. P100,000 A. P165.000 В. P185.000 D. P350,000 20. The following is a summarized income statement of CoolKid Co.'s profit cente No. 44 for March: Contribution margin P70,000 Period expenses: Manager's salary Facility depreciation Corporate expense allocation Profit center income P20.000 8.000 5,000 (33,000) P37.000 Which of the following amounts is most likely subject to the control of the p center's manager? А. P70.000 C. P37,000 D. P33,000 В. P50,000
Compute the Cost Effect- Price Recovery Component indicate if favorable/(unfavorable).
34)
DJH Enterprises has 3 departments. Operating results for 2019 are as follows: Department 1 Department 2 Department 3 Sales Variable Costs Contribution Margin Direct fixed expenses Common fixed expenses Total fixed expenses Operating income (loss) $737,000 489,500 $247,500 $132,000 82,500 Select one: $214,500 $33,000 $354,200 315,700 $38,500 $29,700 33,000 $62,700 $(24,200) $941,600 662,200 $279,400 $179,300 103,400 $282,700 $(3,300) DJH is considering eliminating the departments that show losses. Assume that the direct fixed expenses could be avoided if the department is eliminated. What effect would elimination of Department 3 have on DJH's total operating income? a. It would decrease total operating income by $100,100. b. It would increase total operating income by $103,400. c. It would decrease total operating income by $279,400. d. None of these options are correct. e. It would decrease total operating income by $3,300.
The following information is provided. Project Income Investment A P33,000 P300,000 B P56,250 P750,000 C P27,500 P550,000 Assume the division's current ROI is 10% and the firms minimum required rate of return is 7%. If you were the president of the company, which projects would you want the division manager to accept? a. A, B and C b. A and C c. A and B d. A only e. B only.
Of the foregoing, in all likelihood, Mr. Iglesias controls a. P 165,000 b. P 185,000 c. P 100,000 d. P 350,000
(Management Accounting) The following information is available for Kismer Corporation: Total fixed costs $313,500 Variable costs per unit $90 Selling price per unit $150 If management has a targeted net income of $59,400, then sales revenue should be ________. A) $239,721 B) $580,067 C) $671,220 D) $932,250