Please see attachment

Document Preview:

MGMT640 Section 1121 Spring 2013 Final Exam 1.?A manufacturing company produces 80,000 units of product A at a total cost of $2.4 million. Total fixed costs are $1.4 million. If the company increases production by 25% and uses a 19% markup the price per unit will be:??A)?$31.54??B)?$30.80??C)?$51.80??D)?$37.10?? Use the following to answer questions 2-3: RNO Company’s market for the Model 55 has changed significantly, and RNO has had to drop the price per unit from $265 to $125. There are some units in the work in process inventory that have costs of $150 per unit associated with them. RNO could sell these units in their current state for $100 each. It will cost RNO $10 per unit to complete these units so that they can be sold for $125 each. 2.?A new employee looks at the analysis and exclaims, “We’ll lose money with either of these alternatives! Let’s just throw these units in the trash!” Suppose the alternative to trashing is choosing the more profitable of the two alternatives (that the new employee looked at and did not like). What effect will the trashing option (that the new employee wants) have on net income???A)?Net income will increase by $35 per unit for each unit discarded.??B)?Net income will decrease by $115 per unit for each unit discarded.??C)?It will have no effect on net income.??D)?Net income will decrease by $265 per unit for each unit discarded.?? 3.?When the incremental revenues and expenses are analyzed, the company is better off by??A)?$10 per unit if they sell the units in their current state.??B)?$25 per unit if they sell the units in their current state.??C)?$15 per unit if they complete the units.??D)?$125 per unit if they complete the units.?? 4.?A company using activity based pricing marks up the direct cost of goods by 43% plus charges customers for indirect costs based on the activities utilized by the customer. Indirect costs are charged as follows: $8.00 per order placed; $4.00 per separate item ordered; $30.00 per return….