7. A company expects its three departments to yield the following income Sales E

Question

7. A company expects its three departments to yield the following income Sales Expenses Dept. QDept. R Dept S S6,000 $7,000 $8,000 Avoidable Unavoidable Total expenses Net income (loss) 2,000 3,000 1,500 2,500 3,500 4,000 4,500 8.500 ,500S $2.500 $1500 500) Compute the change to the company's total net income if Dept. S is eliminated. A. $500 increase. B. S500 decrease. C. $4,000 increase. $4,000 decrease. E. $3,500 decrease. 8. A company is considering a new project that will cost $19,000. This project would result annual revenues of $6,000 for the next 5 years. The $19,000 cost is an example of a A. Sunk cost. B. Fixed cost. C. Incremental cost D. Uncontrollable cost. E. Opportunity cost. 9. Marcus processes four different products that can either be sold as is or processed further. Listed below are sales and additional cost data: Sales Sales Value Additional Value after with no further Processing further $2,700 630 1,800 180 Product processing Costs processing Acta Corda Fando Limo S1,350 450 900 90 $900 225 450 45 processed further? Which product(s) should not be A. Acta. B. Corda. C. Fando. D. Limo. E. None of the products should be processd further

Explanation / Answer

SOLUTION

7. Decrease of $4,000 if Department S is eliminated.

Effect on total income=

Deptt. S = Sales - Avoidable Expenses

= $8,000 - $4,000 = $4,000

Decrease in overall profit by $4,000.

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.