ACCT 346 DeVry Entire Course
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Annual fixed selling and administrative expense $80,000<br />
(a) Prepare an income statement using full costing.<br />
(b) Prepare an income statement using variable costing.<br />
6. (TCO 8) Leekee Shipyards has a new barnacle removing product for ocean going vessels. The company invests<br />
$1,200,000 in operating assets and plans to produce and sell 400,000 units per year. Leekee wants to make a return<br />
on investment of 20% each year. Leekee needs to know what price to charge for this product.<br />
Use the absorption costing approach to determine the markup necessary to make the desired return on investment<br />
based on the following information:<br />
Per Unit<br />
Total<br />
Direct Materials $ 2.00<br />
Direct Labor $ 1.50<br />
Variable Manufacturing Overhead $ 1.00<br />
Fixed Manufacturing Overhead $ 100,000<br />
Variable Selling and Administrative Expense $ 0.10<br />
Fixed Selling and Administrative Expense $ 100,000<br />
<strong>ACCT</strong> <strong>346</strong> <strong>DeVry</strong> Week 6 Quiz (Version 2)<br />
Question 1. Question : Which of the following costs is not relevant in decision making?<br />
Sunk cost<br />
Incremental cost<br />
Opportunity cost<br />
Differential cost<br />
Question 2. Question : Which of the following does not take the time value of money into account?<br />
Internal rate of return<br />
Net present value<br />
Payback period<br />
None of the above<br />
Question 3. Question : Which of the following is not a capital budgeting decision?<br />
Purchasing new equipment<br />
Replacing old equipment<br />
Producing a film project<br />
Planning for retirement<br />
Question 4. Question : Which of the following is an example of a sunk cost?<br />
Direct materials<br />
Variable overhead<br />
Equipment depreciation
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