Managerial Acct

35) If the Produce department had been eliminated prior to this year, the company would have reported:

A) greater corporate profits.

B) the same amount of corporate profits.

C) less corporate profits. X

D) resulting profits cannot be determined.

36) If the Fish & Meat department (the Martino Organics Company) had been discontinued, the short-term effect on corporate profits would be a decrease of:

A) $55,000.

B) $34,000. X

C) $31,000.

D) $24,000.

37) Assume that the Sundries department (the Martino Organics Company) has been discontinued and long-term capacity of the company has had time to adjust. The projected long-term effect of this action on annual corporate profits would be a decrease of:

A) $40,000.

B) $32,000.

C) $29,000. X

D) $22,000.

38) Assume an advertising campaign (the Martino Organics Company) could increase revenues for any of the products by $15,000. To maximize corporate profits, the ________ department should receive the advertising dollars. Assume the cost of the advertising campaign is less than the revenues it generates.

A) Sundries X

B) FIsh & Meat

C) Produce

D) From the information given, the correct product line cannot be determined.

The Jordan Company manufacturers only one type of shoe and has two divisions, the Sole Division and the Assembly Division. The Sole Division manufactures soles and then "sells" them to the Assembly Division, which completes the shoes and sells them to retailers. The market price for the Assembly Division to purchase a pair of soles is $40. Fixed costs are per pair at 100,000 units.

Sole's costs per pair of soles are:

Direct materials $8

Direct labor $6

Variable overhead $4

Division fixed costs $2

Assembly's costs per completed pair of shoes are:

Direct materials $10

Direct labor $2

Variable overhead $2

Division fixed costs $18

39) If the cost-based transfer