Two alternatives, code-names X and Y, are under consideration at Afalava Corpora

Question

Two alternatives, code-names X and Y, are under consideration at Afalava Corporation. Costs associated with the alternatives are listed below. Are the materials costs and processing costs relevant in the choice between alternatives X and Y? A) Only materials costs are relevant B) Only processing costs are relevant C) Both materials costs and processing costs arc relevant D) Neither materials costs nor processing costs are relevant 29. A manufacturing company has a large plant that produces several components. including a piston ring. The company is considering purchasing the piston ring from an outside vendor. If the company outsources, the manager of piston ring production will be transferred to an open position in ANOTHER plant. In the make of buy decision, the salary of the piston ring production manager is: A) Relevant B) not Relevant 30. A manufacturer reports the following (all figures in units): Determine the number of units to be produced in February A) 4,100 B) 4,500 C) 4,600 D) 4,900 E) 5,000

Explanation / Answer

28. As processing cost is different in X and Y so it is relevant cost for choosing the alternative

So B is the correct answer

29. As the manager is being shofted to the another plant so it will decrease the salary of manager in the current plant

So it is relevant , A is correct

30. Number of units produced = Budgeted sales + ending inventory - beginning inventory

For february = 5,000 + 400 - 500 = 4,900 units

So D is the correct answer

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