Question
34. By choosing to go into business for himself, Jim Lazar foregoes the possibility of getting a highly paid job with a large company. Based on his decision, what type of cost is t highly paid job? what type of cost is the a. Sunk cost b. Out-of-pocket cost c. Opportunity cost d. Joint cost 35. Costs that have not yet been incurred and that may v ary among different courses of action are called: a. Opportunity costs b. Out-of-pocket costs c. Joint costs d. Sunk costs called: 36. Traceable fixed costs that the manager of a department cannot change are a. Controllable b. Committed c. Conditional d. Common 37. Which of the following is an example of a controllable fixed cost? a. Depreciation b. Property taxes c. Advertising d. Income taxes QUESTIONS 38-40 ARE BASED ON THE FOLLOWING INFORMATION Chic Jewelers views each branch location as an investment center. The local branch reported the following results for the current year: Sales Variable Costs Traceable Fixed Costs Common Fixed Costs $5,500,000 S3,254,000 $320,000 $2,400,000 38. What is the local branch's contribution margin? a. $5,500,000 b. $2,400,000 c. $2,246,000 d. $3,254,000
Explanation / Answer
34 The highly paid job which is foregone is the next highest benefit if it does not chooses to do business. Hence it will be the opportunity cost The correct option is C. Opportunity Cost 35 It will be the variable costs i.e. the out of pocket expenses The correct option is b. Out of Pocket Costs 36 Committed Costs cannot be change by the managers The correct option is b. Committed 37 C. Advertising It is the fixed costs that can be controlled 38 Sales 5500000 Variable Costs 3254000 Contribution Margin 2246000 The correct option is C. $ 2246000
