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1. ACCT 505 Week 6 Quiz – New
2016
Click Link Below To Buy:
https://hwaid.com/shop/acct-505-week-6-quiz-new-2016/
Contact Us:
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ACCT 505 Week 6 Quiz – New 2016
Question : (TCO D) Return on investment (ROI) is equal to the margin
multiplied by
sales.
turnover.
average operating assets.
residual income.

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
Choice A
Choice B
Choice C
Choice D

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?
 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 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.

4. Required:
Prepare a segmented income statement in the contribution format for the
company. Omit percentages; show only dollar amounts.
 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:
 Calculate the company’s current return on investment and residual income.
 The company is investigating an investment of $400,000 in a project that will
generate annual net operating income of $78,000. What is the ROI of the
project? What is the residual income of the project? Should the company invest
in this project?

5.  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:
 According to the company’s accounting system, what is the net operating
income earned by product S85U? Show your work!

6.  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!
 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

7. 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
cost being applied to the part would continue even if the part were purchased
from the outside supplier. This fixed manufacturing overhead cost would be
applied to the company’s remaining products.
Required:
 How much of the unit product cost of $52.30 is relevant in the decision of
whether to make or buy the part?
 What is the net total dollar advantage (disadvantage) of purchasing the part
rather than making it?
iii. What is the maximum amount the company should be willing to pay an outside
supplier per unit for the part if the supplier commits to supplying all 30,000 units
required each year?

8.  Question : (TCO D) Biello Co. manufactures and sells medals for winners of
athletic and other events. Its manufacturing plant has the capacity to produce
15,000 medals each month; current monthly production is 14,250 medals. The
company normally charges $115 per medal. Cost data for the current level of
production are shown below.
Variable Costs
Direct Materials $969,000
Direct Labor $270,750
Selling and Administrative $270,075
Fixed Costs
Manufacturing $370,550
Selling and Administrative $89,775

9. The company has just received a special one-time order for 600 medals at $102
each. For this particular order, no variable selling and administrative costs would
be incurred. This order would also have no effect on fixed costs.
Required:
Should the company accept this special order? Why?