I have attached a copy please show how you found answers . This is Finance Accounting.

I have attached a copy please show how you found answers . This is Finance Accounting.

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Name: __________________________

Date: ___________________

Your work is due by

7:00

PM

on Sunday, August 11, 2013

.

You are not required to submit your working.

However, complete working showing

formulas and calculations may be considered for partial credit for incorrect answers.

Identify the letter of the choice that best completes the statement or answers the question.

1.

Mary Thanes, a college student is contemplating the following options for her 3-month summer

break:

(1) Take a summer course which will cost $700 and work half-time making $1,000 per month.

(2) Work full time at the local dinner making $2,000 per month.

(3) Take the summer class at a cost of $700 and not work during the summer.

Mary’s incremental profit or loss if she chooses option 1 over option 2 would be:

A)

($4,100)

B)

($2,500)

C)

($5,300)

D)

($3,700)

2.

Tynex, Inc., a manufacturing company produces 80,000 units of product A at a total cost of $2.4

million.

Total fixed costs are $1.4 million.

If the company increases production by 25% and

uses a 19% markup, the price per unit will be:

A)

$31.54

B)

$37.10

C)

$30.80

D)

$51.80

Use the following to answer questions 3-4:

XTZ Company’s market for the Model 55 has changed significantly, and XTZ has had to drop

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the price per unit from $265 to $125.

There are some units in the work in process inventory that

have costs of $150 per unit associated with them.

XTZ could sell these units in their current

state for $100 each.

It will cost XTZ $10 per unit to complete these units so that they can be sold

for $125 each.

3.

A new employee looks at the analysis and exclaims, “We’ll lose money with either of these

alternatives! Let’s just throw these units in the trash!” Suppose the alternative to trashing is

choosing the more profitable of the two alternatives (that the new employee looked at and did not

like). What effect will the trashing option (that the new employee

wants) have on net income?

A)

Net income will increase by $35 per unit for each unit discarded.

B)

Net income will decrease by $115 per unit for each unit discarded.

C)

It will have no effect on net income.

D)

Net income will decrease by $100 per unit for each unit discarded.

4.

When the incremental revenues and expenses are analyzed, the company is better off by

A)

$15 per unit if they complete the units.

B)

$25 per unit if they sell the units in their current state.

C)

$10 per unit if they sell the units in their current state.

D)

$125 per unit if they complete the units.

5.

A company using activity based pricing marks up the direct cost of goods by 40% plus charges

customers for indirect costs based on the activities utilized by the customer.

Indirect costs are

charged as follows:

$6.00 per order placed; $3.00 per separate item ordered; $28.00 per return.

A customer places 10 orders with a total direct cost of $2,000, orders 300 separate items, and

makes 5 returns.

What will the customer be charged?

A)

$3,000

B)

$3,900

C)

$5,330

D)

$5,750

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