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1- In a make or buy decision, relevant costs include:

	a.	fixed selling and administrative expenses.
	b.	fixed factory overhead costs applied to products.
	c.	avoidable fixed costs.
	d.	unavoidable fixed costs.

2- ABC Company produces component parts for the items it produces and sells. If ABC were to purchase the component parts rather than continue to produce them, ABC could lease the production space to a third party. The revenue earned from the lease should be subtracted from the costs of making the component part when ABC is deciding between continuing to produce the part and purchasing the part.

True

False

3-

Manufacturing cycle efficiency is computed as:

	a.	Manufacturing cycle time / Value added time
	b.	Process time / Throughput time
	c.	Manufacturing cycle time / total time
	d.	Value added time / delivery cycle time

4-

Incremental costs:

	a.	should always be avoided.
	b.	are incurred regardless of the decision being made.
	c.	are always equal to the incremental revenues.
	d.	are the additional costs associated with one of the alternatives.

5-

The following information is given for Aces Corp. for the most recent year.

Sales $2,000,000

Net Operating Income $250,000

Operating Assets $500,000

Calculate the turnover for Aces Corp. for the most recent year.

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