Question 8 of 17 View Policies Current Attempt in Progress A factory is operating at less than 100% capacity. Potential additional business will not use up the remainder of the plant capacity. Which one of the following costs will be ignored in a decision to produce and sell additional units of product? Contribution margin of additional units Direct labor Variable selling expenses Fixed factory overhead Save for Later Attempts: 0 of 1 used Submit Answer
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A factory is operating at less than 100% capacity. Potential additional business will not use up the remainder of the plant capacity. Given the following list of costs which one should be ignored in a decision to produce additional units of product? a. Variable selling expenses b. Fixed factory overhead c. Direct labor d. Contribution margin of additional units
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Mountainburg Industries has developed two new products but has only enough plant capacity to introduce one product during the current year. The following data will assist management in deciding which product should be selected. Mountainburg's fixed overhead includes rent and utilities, equipment depreciation, and supervisory salaries. Selling and administrative expenses are not allocated to individual products. The total overhead cost of $27 for Mountainburg's Product W is a Variable cost. Opportunity cost. Mixed cost. Sunk cost. Question 8 of 10
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36. In contrast to the total product and variable cost concepts used in setting sellers' prices, the target cost approach assumes that: a. a markup is added to total cost b. selling price is set by the marketplace c. a markup is added to variable cost d. a markup is added to product cost 37. The profit margin for Division E is 28% and the investment turnover is 2.8. What is the rate of return on investment for Division E? a. 20% b. 28% c. 14% d. 78.4% 38. If variable costs per unit decreased because of a decrease in utility rates, the break-even point would: a. decrease b. increase c. remain the same d. increase or decrease, depending upon the percentage increase in utility rates 39. Nevitt Corp.'s static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, utilities of $5,000, and supervisor salaries of $15,000. A flexible budget for 12,000 units of production would show: a. the same cost structure in total b. direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $18,000 c. total variable costs of $136,800 d. direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $15,000 40. Which types of inventories does a manufacturing business report on its balance sheet? a. Finished goods inventory and work in process inventory b. Direct materials inventory and work in process inventory c. Direct materials inventory, work in process inventory, and finished goods inventory d. Direct materials inventory and finished goods inventory
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