Page 2 4. Allocated common fixed costs can make a product line appear to be whic

Question

Page 2 4. Allocated common fixed costs can make a product line appear to be which of the below? a. Unprofitable b. Profitable c. Break-even only d. Not part of profitable/unprofitable analysis Utilization of a constrained resource is prioritized by the highest to lowest contribution margin gained at which level? 5. Highest unit level of the constrained resource Lowest unit level of the constrained resource Break-even unit level of the constrained resource Highest batch unit level of the constrained resource a. b. c. d. My company uses the same blue wool thread to make sweaters, gloves and hats. While they are still in the process of being completed, they would be an example of which of the below? 6. a. Stand-alone products b. Split-off products c. Finishing products d. Joint products

Explanation / Answer

1) Allocated common fixed costs can make a product line appear to be which of the below?

Solution: Unprofitable

Explanation: Allocated common fixed costs can make a product line or segment appear unprofitable

2) Utilisation of a constrained resource is priortized by the highest to lowest contribution margin gained at which level?

Solution: Highest unit level of the constrained resource

Explanation: Highest unit level of the constrained resource is priortized by the highest to lowest contribution margin

3) My company uses the same blue wool thread to make sweaters, gloves and hats. While they are still in the process of being completed, they would be an example of which of the below

Solution: Joint product

Explanation: Joint product refers to the production of two or more products from the same basic raw material and afterwards are distinguished in the course of same processing operation

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