Managerial Acct: Product Costing Multiple Choice Name: Nind pham #al s21Class: I

Question

Managerial Acct: Product Costing Multiple Choice Name: Nind pham #al s21Class: ID: A Date: test 25 Multiple Choice Identify the choice that best completes the statement or answers the guestion. 1· Quail Co. can further process Product B to produce Product C Product B is currently selling for S60 per pound and costs $42 per pound to produce. Product C would sell for $92 per pound and would require an additional cost of $13 per pound to produce. What is the differential revenue of producing and selling Product C? a. $32 per pound b. $42 per pound c. $50 per pound d. $18 per pound Falcon Co. produces a single product. Its normal selling price is $30.00 per unit. The variable costs are $19.00 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units and a special price of $20.00 per unit. Falcon Co. has the capacity to handle the special order and, for this order, a variable selling cost of $1.00 per unit would be eliminated. 2 If the order is accepted, what would be the impact on net income? a. decrease of $750 b. decrease of $4,500 c. increase of $3,000 d. increase of $1,500 Magpie Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% rate of return on invested assets of $700,000. Fixed factory overhead cost Fixed selling and administrative costs Variable direct materials cost per unit Variable direct labor cost per unit Variable factory overbead cost per unit Variable selling and administrative cost per unit $38,700 7,500 4.60 1.88 1.13 4.50 The cost per unit for the production and sale of the company's product is: a. $12.11 b. $12.88 c. $15 d. $13.50 3·

Explanation / Answer

1.) Differential Revenue
= Revenue (C) - Revenue (B)
= $92 - $60
= $32

So the correct answer is A

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