1. Dollaz Unlimited makes custom office desks.

| June 12, 2016

Question
1. Dollaz Unlimited makes custom office desks. It can sell semi- finished desks for $800. Costs incurred to this point total $500. It can finish the desks at an additional cost of $200 and increase the selling price to $1,100. Dollaz Unlimited should:
A. sell the desks unfinished since finishing the desks will reduce profits.
B. finish the desks since it will increase profits $300 per desk.
C. finish the desks since it will increase profits $600 per desk.
D. finish the desks since it will increase profits $100 per desk.

2. A static budget is:
A. modified or adjusted for changes in activity during the year.
B. appropriate in evaluating a manager’s effectiveness in controlling fixed costs.

3. Barcardi Company desires net income of $1,100,000 when it has $2,500,000 of fixed costs and variable costs of 60% of sales. Required sales equals:
A. $6,250,000.
B. $9,000,000.
C. $6,000,000.
D. $2,750,000.

4. Given the following costs for Harper Company, classify each cost as variable, fixed, or mixed.
Total cost at
4,000 units 6,000 units
Cost A $12,300 16,650
Cost B 17,200 25,800
Cost C 13,000 13,000

5. The initial budget prepared in the master budget is the:
A. sales budget.
B. 
budgeted income statement.
C. production budget.
D. budgeted balance sheet.

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