DEVRY ACCT 505 Week 6 Quiz Segment Reporting - PowerPoint PPT Presentation

About This Presentation

DEVRY ACCT 505 Week 6 Quiz Segment Reporting


DEVRY ACCT 505 Week 6 Quiz Segment Reporting and Relevant Costs for Decisions Check this A+ tutorial guideline at – PowerPoint PPT presentation

Number of Views:7


Transcript and Presenter's Notes

Title: DEVRY ACCT 505 Week 6 Quiz Segment Reporting

DEVRY ACCT 505 Week 6 Quiz Segment Reporting and
Relevant Costs for Decisions
  • Check this A tutorial guideline at
  • http//
  • For more classes visit
  • http//
  • Question
  • (TCO D) Return on investment (ROI) is equal to
    the margin multiplied by
  • 2.
  • Question
  • (TCO D) For which of the following decisions are
    opportunity costs relevant?
  • The decision to make or buy a needed part
  • The desision to keep or drop a product line

  • (A)
  • Yes
  • Yes
  • (B)
  • Yes
  • No
  • (C)
  • No
  • Yes
  • (D)
  • No
  • No
  • 3.
  • Question
  • (TCO D) Last year, the House of Orange had sales
    of 826,650, net operating income of 81,000, and
    operating assets of 84,000 at the beginning of
    the year and 90,000 at

  • the end of the year. What was the company's
    turnover, rounded to the nearest tenth?
  • 1.
  • Question
  • (TCO D) Data for December concerning Dinnocenzo
    Corporation's two major business segments-Fibers
    and Feedstocks-appear below
  • Sales revenues, Fibers
  • 870,000
  • Sales revenues, Feedstocks
  • 820,000
  • Variable expenses, Fibers
  • 426,000
  • Variable expenses, Feedstocks
  • 344,000
  • Traceable fixed expenses, Fibers
  • 148,000
  • Traceable fixed expenses, Feedstocks

  • Traceable fixed expenses, Feedstocks
  • S156,000
  • Common fixed expenses totaled 314,000 and were
    allocated as follows 129,000 to the Fibers
    business segment and 185,000 to the Feedstocks
    business segment.RequiredPrepare a segmented
    income statement in the contribution format for
    the company. Omit percentages show only dollar
  • 2.
  • Question
  • (TCO D) Wryski Corporation had net operating
    income of 150,000 and average operating assets
    of 500,000. The company requires a return on
    investment of 19.Required
  • i. Calculate the company's current return on
    investment and residual income.ii. The company
    is investigating an investment of 400,000 in a
    project that will the company invest in this

  • What is the residual income of the project?
    Should the company invest in this project?
  • 3.
  • Question
  • (TCO D) Tjelmeland Corporation is considering
    dropping product S85U. Data from the company's
    accounting system appear below.
  • Sales
  • 360,000
  • Variable Expenses
  • 158,000
  • Fixed Manufacturing Expenses
  • 119,000
  • Fixed Selling and Administrative Expenses
  • 94,000
  • All fixed expenses of the company are fully
    allocated to products in the company's accounting
    system. Further investigation has revealed that
    55,000 of the fixed

  • manufacturing expenses and 71,000 of the fixed
    selling and administrative expenses are avoidable
    if product S85U is discontinued.Required
  • i. According to the company's accounting system,
    what is the net operating income earned by
    product S85U? Show your work!ii. What would be
    the effect on the company's overall net operating
    income of dropping product S85U? Should the
    product be dropped? Show your work!
  • 4.
  • Question
  • (TCO D) Fouch Company makes 30,000 units per year
    of a part it uses in the products it
    manufactures. The unit product cost of this part
    is computed as follows.
  • Direct Materials
  • 15.70
  • Direct Labor
  • 17.50

  • Variable Manufacturing Overhead
  • 4.50
  • Fixed Manufacturing Overhead
  • 14.60
  • Unit Product Cost
  • 52.30
  • An outside supplier has offered to sell the
    company all of these parts it needs for 51.90 a
    unit. If the company accepts this offer, the
    facilities now being used to make the part could
    be used to make more units of a product that is
    in high demand. The additional contribution
    margin on this other product would be 219,000
    per year.If the part were purchased from the
    outside supplier, all of the direct labor cost of
    the part would be avoided. However, 6.20 of the
    fixed manufacturing overhead
Write a Comment
User Comments (0)