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1 POINT 2 POINTS 3 POINTS 4 POINTS 5 POINTS Choc. Creme 1 POINT 4 POINTS 3 POINTS 2 POINTS2 POINTS 3 POINTS 2 POINTS 5 POINTS 2 POINTS 3 POINTS 4 POINTS 5 POINTS 4 POINTS 3 POINTS 4 POINTS 5 POINTS NONEJelly Boston Creme Cruller
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This is the increase or decrease in revenue when comparing two alternatives. 1 POINT
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What is Differential Revenue?
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This is the increase or decrease in cost when comparing two alternatives. 2 POINTS
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What is differential cost?
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This is a type of cost that occurred in the past and shouldn’t be considered when evaluating alternatives. 3 POINTS
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What is a sunk cost?
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4 POINTS If _______costs are more than the revenue of a product, it should be discontinued.
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What is variable?
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The rate of earnings is 6% and the cash to be received in three years is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest: Year6%10%12% 1.943.909.893 2.890.826.797 3.840.751.712 4.792.683.636 5 POINTS
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What is $8,400?
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A dollar today is worth more than a dollar tomorrow – this is the main idea behind the _____ value of money. 1 POINT
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What is time?
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Decisions to buy new equipment, expand a building, etc are examples of _______ ________ analysis. 2 POINTS
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What is capital investment?
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These are two capital analysis methods that take into account present value. 3 POINTS
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What are the IRR and the net present value methods?
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Estimated average annual income divided by average investment 4 POINTS
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What is the average rate of return method?
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The expected average rate of return for a proposed investment of $400,000 in a fixed asset, with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $120,000 for the 4 years, is: 5 POINTS
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What is 15%?
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A series of equal payments at fixed interval is called this. 1 POINT
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What is an annuity?
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Transportation between departments is considered _______-________ time. 2 POINTS
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What is nonvalue added time?
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In a JIT environment, _______ are empowered to make decisions about operations. 3 POINTS
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What are employees?
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4 POINTS In a JIT environment, inventory purchases are recorded to this account.
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What is Raw and In Process Inventory?
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When ranking several alternative proposals of different investment amounts it is useful to compare them using their ________ _______ ________. 5 POINTS
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What is the present value index?
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A traditional manufacturing system manufactures products, sends them to stores and waits for a customer to buy them – this is a _____ system. 1 POINT
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What is a push system?
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In a JIT system, the end customer requests the product directly from the manufacturer – this is called a _____ system. 2 POINTS
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What is a pull system?
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This capital investment analysis method determines (in years) how long it will take to recoup the initial investment. 3 POINTS
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What is the cash payback method?
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A main tenet of a JIT environment is reliance on vendors and suppliers – this is what’s called ______ ______ ______ 4 POINTS
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What is supply chain management?
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5 POINTS Labor costs and factory overhead are debited directly to this account.
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What is Raw and In Process Inventory?
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1 POINT
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2 POINTS
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3 POINTS
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4 POINTS
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5 POINTS
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CATEGORY: Make or buy? MAKE YOUR WAGER!
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ANSWER: A business is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $18 per unit. The unit cost for the business to make the part is $25, including fixed costs, and $11, not including fixed costs. If 20,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it? (Include dollar amount and “increase/decrease” with your answer).
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QUESTION What is $140,000 decrease in cost?
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