56) The costs of manufacturing joint products after the split-off point are referred to as

A) joint costs.

B) outlay costs.

C) opportunity costs.

D) separable costs.

57) Which of the following is NOT an example of a joint product?

A) Sponges

B) Chemicals

C) Lumber

D) Meat packing

58) Two or more manufactured products that have relatively significant sales values and are NOT separately identifiable as individual products until their split-off point are called

A) separable products.

B) by-products.

C) distinct products.

D) joint products.

59) It is profitable to extend processing or to incur additional distribution costs on a joint product if the

A) incremental expenses exceed incremental revenues.

B) sale of the product is guaranteed.

C) additional revenue exceeds the additional expenses.

D) joint products are inseparable.

60) Which of the following is NOT likely to be relevant in a decision concerning the disposal of obsolete inventory?

A) Inventory cost

B) Expected future revenues

C) Scrap value of inventory

D) Expected future costs

61) Which of the following is NOT likely to be relevant in a decision to replace equipment?

A) Cost of new equipment

B) Book value of old equipment

C) Selling price of old equipment

D) Maintenance costs of old equipment

62) The periodic cost of equipment which is spread over the future periods in which the equipment is expected to be used is called

A) net book value.

B) current cost.

C) operating cost.

D) depreciation.

63) Book value is defined as

A) disposal value.

B) disposal value less accumulated depreciation.

C) cost less accumulation depreciation.

D) disposal value less original cost.

Overland Company is considering replacing a machine that is presently used in the production of its product. The following data are available:

Replacement

Old Machine

Machine

Original cost

$90,000

$70,000

Useful life in years

         10

          5

Current age in years

          5

          0

Book value

$50,000

           –

Disposal value now

$16,000

           –

Disposal value in 5 years

          0

          0

Annual cash operating costs

$14,000

$  8,000

64) Which of the data provided in the table is irrelevant?

A) The annual operating cost of the old machine

B) The original cost of the replacement machine

C) The disposal value of the old machine

D) The book value of the old machine

65) Which of the data provided in the table is a sunk cost?

A) The annual cash operating costs of the old machine

B) The annual cash operating costs of the replacement machine

C) The disposal value of the old machine

D



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