Chapter 14 Multiple-choice questions

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. Which of these are not relevant costs?

Incremental and sunk correct incorrect

Sunk and committed correct incorrect

Committed and incremental correct incorrect

Opportunity and committed correct incorrect

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. A building contractor has carried out a survey with a cost of £5,000 so that he can put in a bid to build a new factory. He has paid £3,000 so far. Which survey costs are relevant to his bid?

£2,000 still to pay correct incorrect

£5,000 total survey cost correct incorrect

None correct incorrect

£3,000 already paid correct incorrect

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. A supermarket is considering running a promotion on one of its washing powder brands. By doing this, it will not be able to run a campaign on its shampoo brands, which would have generated a contribution of £50,000. What type of cost is this £50,000?

Marginal correct incorrect

Direct correct incorrect

Activity correct incorrect

Opportunity correct incorrect

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. To complete an order for making curtains, Rosa will need to employ three seamstresses for two days at $30 per day. It will also take five hours of her time, which she costs out at $10 per hour. She will receive $500 and have to buy materials of $220. If she accepts this order, she will have to turn down another order, which would have generated a contribution of $80. How much contribution will she make?

$100 correct incorrect

$20 correct incorrect

None correct incorrect

$50 correct incorrect

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. A catering business has to make decisions about which sandwiches to make itself and which to buy-in from third party suppliers. The transport costs are a fixed charge if it makes the sandwiches itself. Which sandwiches should it make?

Cheese and jam correct incorrect

Ham only correct incorrect

Ham, cheese, jam correct incorrect

Ham and cheese correct incorrect

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. A clothing company produces wool jumpers. If wool is limited, in what order should these jumpers be produced to maximize the company's profits?

Man, woman, child correct incorrect

Woman, child, man correct incorrect

Child, woman, man correct incorrect

Woman, man, child correct incorrect

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. A garage faces difficulties with a shortage of skilled labour to repair and service cars. If there are only 120 hours available, how many repairs and services should they carry out to optimise the contribution?

20 repairs and 20 services correct incorrect

10 repairs and 40 services correct incorrect

30 repairs and no services correct incorrect

15 repairs and 30 services correct incorrect

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. A photographic company is estimating the benefits of investing in a new printer to improve its output. Its current variable costs are £2.50 per photo and current fixed costs are £10,000. If the new printer increases fixed costs by 15% but reduces variable costs by 5%, at what level of production should they change to the new machine?

12,000 photos correct incorrect

1,333 photos correct incorrect

4,842 photos correct incorrect

4,000 photos correct incorrect

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. A catering company is considering investing in 10 microwave ovens costing $800 each to speed up its cooking times. If they plan to cook 3,000 meals in a year to break even, how much labour cost do they need to save per meal?

$0.38 correct incorrect

$3.75 correct incorrect

$0.27 correct incorrect

$2.67 correct incorrect

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. Which of the following shops should be closed down?

Bristol and York correct incorrect

York only correct incorrect

London and York correct incorrect

London and Bristol correct incorrect