When using residual income as a project-screening tool, management should accept a project if the residual income is:
A. greater than net income.
B. negative.
C. equal to the ROI.
D. positive.
Answer: D
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The balance in Allowance for Doubtful Accounts must be carefully considered prior to the end of the year adjustment when applying which method?
A) direct write-off method B) estimate based on sales C) estimate based on an analysis of receivables D) both (b) and (c)
Consider the estimated aggregate demand for a company’s ski product line for the upcoming year in the following table. Calculate the hiring cost for month of January using the chase production strategy. The average number of hours required to produce a pair of skis is 8 hr, and the number of worker hours per month is 160. The current workforce is 100. The beginning inventory for January is zero. The hiring cost per worker is $400.
A. $120,000
B. $150,000
C. $200,000
D. $100,000