Use the information in Table 10.1. If anticipation inventory were 30 units at the start of the first month, what would the backorder cost be in the fourth month?
A) $840
B) $740
C) $640
D) $540
D
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Which of the following statements about quality costs is true?
A) Even in theory, external failure costs can never be reduced to zero. B) The less a company spends on prevention costs, the less they will have to spend on internal failure costs in the future. C) If a company produces and sells a defective product, external failure costs are likely to exceed all the other types of quality costs. D) A low level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs.
If insurers have insufficient pricing information available for a particular exposure:
A) they go bankrupt B) they will need to create a larger risk pool C) they will probably be unwilling to provide insurance for that particular loss exposure D) they will assume more risk
A $1,000 par value bond with a 12% coupon rate currently selling for $825 has a current yield of
A) 14.55%. B) 12.44%. C) 7.27%. D) 5.61%.
Warner Company purchased two units of a product for $36 and later purchased one more for $40. If the company uses the weighted average cost flow method, and it sold one unit of the product for $60, its gross margin would be $22.00.
Answer the following statement true (T) or false (F)