1. In the minimum transfer price formula, variable cost is defined as the variab
ID: 2380308 • Letter: 1
Question
1. In the minimum transfer price formula, variable cost is defined as the variable cost of: A) Units sold externally B) All units sold, both internally and externally C) Units not sold D) units sold internally 2. Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $300,000 $600,000 Accumulated Depreciation 90,000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $240,000 $180,600 If the old machine is replaced, it can be sold for $24,000.The net advantage (disadvantage) of replacing the old machine is: A)$(60000) B)$24000 C)$18000 D)$(6000) 3. All of the following are correct statements about the market-based approach except that it: A)produces a higher company contribution margin than the cost-based approach B)provides a fairer allocation of the company's contribution margin to each division C) ensures that each division manager is properly motivated and rewarded D)assumes that the transfer price should be based on the most objective inputs possible 4.The following data is available for Wheels 'N Spokes Repair Shop for 2013: Repair technicians' wages $360,000 Fringe benefits 80,000 Overhead 60,000 Total $500,000 The desired profit margin is $40 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5,000 labor hours will be worked in 2013.Wheels 'N Spokes labor charge in 2013 would be: A) $128 B) $112 C)$140 D)$100 5. In time-and-material pricing, a material loading charge covers all of the following except: A) purchasing costs B)related overhead C) desired profit margin D) All of these are covered 6. All of the following are correct statements about the target price except it: A) is determined after the company has identified its market and does research B)is determined after the company sets its desired profit amount C) is used to determine a product's target cost D) is the price the company believes would place it in the optimal position for its target audience 1. In the minimum transfer price formula, variable cost is defined as the variable cost of: A) Units sold externally B) All units sold, both internally and externally C) Units not sold D) units sold internally 1. In the minimum transfer price formula, variable cost is defined as the variable cost of: A) Units sold externally B) All units sold, both internally and externally C) Units not sold D) units sold internally 2. Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: 2. Old Machine New Machine Price $300,000 $600,000 Accumulated Depreciation 90,000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $240,000 $180,600 If the old machine is replaced, it can be sold for $24,000.The net advantage (disadvantage) of replacing the old machine is: A)$(60000) B)$24000 C)$18000 D)$(6000) 3. All of the following are correct statements about the market-based approach except that it: A)produces a higher company contribution margin than the cost-based approach B)provides a fairer allocation of the company's contribution margin to each division C) ensures that each division manager is properly motivated and rewarded D)assumes that the transfer price should be based on the most objective inputs possible 4.The following data is available for Wheels 'N Spokes Repair Shop for 2013: Repair technicians' wages $360,000 Fringe benefits 80,000 Overhead 60,000 Total $500,000 The desired profit margin is $40 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5,000 labor hours will be worked in 2013.
Wheels 'N Spokes labor charge in 2013 would be: A) $128 B) $112 C)$140 D)$100 5. In time-and-material pricing, a material loading charge covers all of the following except: A) purchasing costs B)related overhead C) desired profit margin D) All of these are covered 6. All of the following are correct statements about the target price except it: A) is determined after the company has identified its market and does research B)is determined after the company sets its desired profit amount C) is used to determine a product's target cost D) is the price the company believes would place it in the optimal position for its target audience Old Machine New Machine Price $300,000 $600,000 Accumulated Depreciation 90,000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $240,000 $180,600 If the old machine is replaced, it can be sold for $24,000.The net advantage (disadvantage) of replacing the old machine is: A)$(60000) B)$24000 C)$18000 D)$(6000) 3. All of the following are correct statements about the market-based approach except that it: A)produces a higher company contribution margin than the cost-based approach B)provides a fairer allocation of the company's contribution margin to each division C) ensures that each division manager is properly motivated and rewarded D)assumes that the transfer price should be based on the most objective inputs possible 4.The following data is available for Wheels 'N Spokes Repair Shop for 2013: Repair technicians' wages $360,000 Fringe benefits 80,000 Overhead 60,000 Total $500,000 The desired profit margin is $40 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5,000 labor hours will be worked in 2013.
Wheels 'N Spokes labor charge in 2013 would be: A) $128 B) $112 C)$140 D)$100 5. In time-and-material pricing, a material loading charge covers all of the following except: A) purchasing costs B)related overhead C) desired profit margin D) All of these are covered 6. All of the following are correct statements about the target price except it: A) is determined after the company has identified its market and does research B)is determined after the company sets its desired profit amount C) is used to determine a product's target cost D) is the price the company believes would place it in the optimal position for its target audience Old Machine New Machine Price $300,000 $600,000 Accumulated Depreciation 90,000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $240,000 $180,600 If the old machine is replaced, it can be sold for $24,000.The net advantage (disadvantage) of replacing the old machine is: A)$(60000) B)$24000 C)$18000 D)$(6000) 3. All of the following are correct statements about the market-based approach except that it: A)produces a higher company contribution margin than the cost-based approach B)provides a fairer allocation of the company's contribution margin to each division C) ensures that each division manager is properly motivated and rewarded D)assumes that the transfer price should be based on the most objective inputs possible 4.The following data is available for Wheels 'N Spokes Repair Shop for 2013: Repair technicians' wages $360,000 Fringe benefits 80,000 Overhead 60,000 Total $500,000 The desired profit margin is $40 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5,000 labor hours will be worked in 2013.
Wheels 'N Spokes labor charge in 2013 would be: Repair technicians' wages $360,000 Fringe benefits 80,000 Overhead 60,000 Total $500,000 The desired profit margin is $40 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5,000 labor hours will be worked in 2013.
A) $128 B) $112 C)$140 D)$100 5. In time-and-material pricing, a material loading charge covers all of the following except: A) purchasing costs B)related overhead C) desired profit margin D) All of these are covered 6. All of the following are correct statements about the target price except it: A) is determined after the company has identified its market and does research B)is determined after the company sets its desired profit amount C) is used to determine a product's target cost D) is the price the company believes would place it in the optimal position for its target audience Old Machine New Machine
Explanation / Answer
1. In the minimum transfer price formula, variable cost is defined as the variable cost is units sold internally
2. The net advantage (disadvantage) of replacing the old machine is $18000
3.correct statements about the market-based approach except that it A)produces a higher company contribution margin than the cost-based approach
4.The desired profit margin is $40 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5,000 labor hours will be worked in 2013. is $140
5.In time-and-material pricing, a material loading charge covers all of the following except: A) purchasing costs
6.the target price except it is the price the company believes would place it in the optimal position for its target audience
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