One of the employees of Davenport Corporation recently was involved in an accident with one of the corporation's delivery vans. The corporation is either going to repair the damaged van or sell it as is and buy a comparable used van. Information related to this decision is provided below: Initial cost of the damaged van $30,000 Accumulated depreciation to date on van $18,000 Salvage value of van immediately before crash $9,000 Salvage value of van immediately after crash $1,000 Cost to repair damaged van $5,000 Cost of a comparable used van $10,000 Based on the information above, Davenport would be financially better off:
A. $1,000 by buying the comparable van.
B. $2,000 by buying the comparable van.
C. $2,000 by repairing the damaged van.
D. $4,000 by repairing the damaged van.
查看答案
Gallerani Corporation has received a request for a special order of 6,000 units of product A90 for $21.20 each. Product A90's unit product cost is $16.20, determined as follows: Direct materials $ 6.10 Direct labor 4.20 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 3.60 Unit product cost $ 16.20 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product A90 that would increase the variable costs by $4.20 per unit and that would require an investment of $21,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:
A. $(18,600)
B. $(16,200)
C. $30,000
D. $5,400
Danny Dolittle makes crafts in his spare time and always sells everything he makes at local craft shows. Danny specializes in four products. Because Danny's time is limited before the next craft show, he is trying to decide how to use his time to the best advantage. Information related to the four products that Danny produces are shown below: Rag Dolls Pot Holders Bread Baskets Finger Puppets Contribution margin per unit $ 8 $ 2 $ 12 $ 6 Contribution margin ratio 40 % 25 % 32 % 30 % Time required per unit (in hours) 1.4 0.5 3.5 2.0 Rank the products from the most profitable to the least profitable use of the constrained resource.
A. Rag Dolls, Pot Holders, Bread Baskets, Finger Puppets
B. Rag Dolls, Bread Baskets, Finger Puppets, Pot Holders
C. Pot Holders, Rag Dolls, Finger Puppets, Bread Baskets
D. Bread Baskets, Rag Dolls, Finger Puppets, Pot Holders
Cybil Baunt just inherited a 1958 Chevy Impala from her late Aunt Joop. Aunt Joop purchased the car 40 years ago for $8,000. Cybil is either going to sell the car for $10,000 or have it restored and then sell it for $22,000. The restoration will cost $9,000. Cybil would be financially better off by:
A. $3,000 to have the vehicle restored
B. $6,000 to have the vehicle restored
C. $9,000 to have the vehicle restored
D. $11,000 to have the vehicle restored
Two products, QI and VH, emerge from a joint process. Product QI has been allocated $9,600 of the total joint costs of $12,000. A total of 9,000 units of product QI are produced from the joint process. Product QI can be sold at the split-off point for $13 per unit, or it can be processed further for an additional total cost of $54,000 and then sold for $18 per unit. If product QI is processed further and sold, what would be the financial advantage (disadvantage) for the company compared with sale in its unprocessed form directly after the split-off point?
A. ($18,600)
B. $108,000
C. $600
D. ($9,000)