23. Tyler’s Consulting Company has purchased a new $15,000 copier. This overhead

Question

23. Tyler’s Consulting Company has purchased a new $15,000 copier. This overhead cost will be shared by the purchasing, accounting, and information technology departments since those are the only departments which will be able to access the machine. The company has decided to allocate the cost based on the number of copies made by each department. The copier is estimated to provide 1 million copies over its life. Each division has estimated the number of copies which will be made over the life of the copier.
Purchasing 350,000
Accounting 200,000
Information Tech 425,000
Note: Cost allocations are computed to 4 significant digits. Resulting values are rounded to the whole dollar.
If the purchasing department makes 140,260 copies this year what will be their allocated overhead?
A. $25,200
B. $70,200
C. $1,109
D. $2,160

24. Which of the following costs are always incremental and relevant in decision analysis?
A. opportunity costs and joint costs
B. joint costs and avoidable costs
C. avoidable costs and opportunity costs
D. sunk costs and avoidable costs

25. The Tobias Company has 12 obsolete computers that are carried in inventory at a cost of $13,200. If these computers are upgraded at a cost of $7,500, they could be sold for $19,500. Alternatively, the calculators could be sold “as is” for $9,000. What is the net advantage or disadvantage of re-working the computers?
A. $12,000 advantage
B. $1,200 disadvantage
C. $10,200 disadvantage
D. $3,000 advantage

Explanation / Answer

23.Option " A " is the correct answer 24. Option "A" is the correct answer . sunk costs and avoidable costs

25. Option " D" is the corerct answer. Without up grads the computer cost = 13200 less : could be sell = 9000 loss = 4200 if it is upagraded = 13200+ 7500 = 20700 less :sold = 19500 Loss = 1200 So loss can be avoid through this activity = 4200-1200 =3000

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