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1. In a sell or process further decision, which of the following costs is releva

ID: 2415458 • Letter: 1

Question

1. In a sell or process further decision, which of the following costs is relevant?

I. A variable production cost incurred after split-off.

II. A fixed production cost incurred prior to split off.

Both I and II

Neither I nor II

Only II

Only I

2. Bactrian Corporation sells desks at $600 per desk. The variable costs associated with each desk are as follows:

Total fixed costs for the period are $175,000. The contribution margin per desk is _____.

A.

Both I and II

B.

Neither I nor II

C.

Only II

D.

Only I

2. Bactrian Corporation sells desks at $600 per desk. The variable costs associated with each desk are as follows:

Direct materials $100 Direct labor $70 Factory overhead $20

Total fixed costs for the period are $175,000. The contribution margin per desk is _____.

Explanation / Answer

1. In a sell or process further decision, which of the following costs is relevant?

Only I ie I. A variable production cost incurred after split-off.

D.

Only I ie I. A variable production cost incurred after split-off.