41.In using the total cost concept of applying the cost-plus approach to product pricing, selling expenses, administrativeexpenses, and profit are covered in the markup.
a.True
b.False
42.Under the total cost concept, manufacturing cost plus desired profit is included in the total cost per unit.
a.True
b.False
43.The total cost concept includes all manufacturing costs plus selling and administrative expenses in the cost amountto which the markup is added to determine product price.
a.True
b.False
44.Under the variable cost concept, only variable costs are included in the cost amount per unit to which the markup isadded.
a.True
b.False
45.The desired selling price for a product will be the same under both variable and total cost.
a.True
b.False
46.The amount of increase or decrease in revenue that is expected from a particular course of action as comparedwith an alternative is
a.manufacturing margin
b.contribution margin
c.differential cost
d.differential revenue
47.The amount of increase or decrease in cost that is expected from a particular course of action as compared with analternative is
a.period cost
b.product cost
c.differential cost
d.discretionary cost
48.A cost that will
not
be affected by later decisions is termed a(n)
a.period cost
b.differential cost
c.sunk cost
d.replacement cost
49.The condensed income statement for a Fletcher Inc. for the past year is as follows:
|
Product
|
|
|
F
|
G
|
H
|
Total
|
Sales
|
$300,000
|
$210,000
|
$340,000
|
$850,000
|
Costs:
|
|
|
|
|
Variable costs
|
$180,000
|
$180,000
|
$220,000
|
$590,000
|
Fixed costs
|
50,000
|
50,000
|
40,000
|
140,000
|
Total costs
|
$230,000
|
$230,000
|
$260,000
|
$730,000
|
Income (loss)
|
$ 70,000
|
$(20,000)
|
$ 80,000
|
$120,000
|
|
|
|
|
|
Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of thecurrent year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales ofProducts F and H. What is the amount of change in net income for the current year that will result from thediscontinuance of Product G?
a.$20,000 increase
b.$30,000 increase
c.$20,000 decrease
d.$30,000 decrease
50.The condensed income statement for a Hayden Corp. for the past year is as follows:
|
Product
|
|
T
|
U
|
Sales
|
$680,000
|
$320,000
|
Costs:
|
|
|
Variable costs
|
$540,000
|
$220,000
|
Fixed costs
|
145,000
|
40,000
|
Total costs
|
$685,000
|
$260,000
|
Income (loss)
|
$ (5,000)
|
$ 60,000
|
|
|
|
Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of thecurrent year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales ofProduct U. What is the amount of change in net income for the current year that will result from the discontinuanceof Product T?
a.$140,000 increase
b.$5,000 increase
c.$5,000 decrease
d.$140,000 decrease