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MGMT640 1121Final ExamSpring 2015Name: __________________________Date: ___________________TheFinal Examis individual work. All work on the exam should be from your own efforts, withno assistance from classmates, family, friends or others.By proceeding with this exam, you areagreeing not to share the exam content or your responses with anyone, including future studentsof MGMT640.Your completed exam is due by7:00 PM on Sunday, April 26, 2015(upload toyourFinal Examfolder underAssignments).Please refer to the Syllabus for the policy regarding late submissions.There will be nomake-up exams except for documented emergencies.You are not required to submit your working.However, complete working showingformulas and calculations may be considered for partial credit for incorrect answers.Identify the letter of the choice that best completes the statement or answers the question.1. A manufacturing company produces 100,000 units of product A at a total cost of \$2.8million.Total fixed costs are \$1.2 million.If the company increases production by 18%and uses a 23% markup the price per unit will be:A)\$31.54B)\$32.19C)\$35.47D)\$37.10Use the following to answer questions 2-3:RNO Company’s market for the Model 55 has changed significantly, and RNO has had to dropthe price per unit from \$225 to \$165.There are some units in the work in process inventory thathave costs of \$200 per unit associated with them.RNO could sell these units in their currentstate for \$150 each.It will cost RNO \$50 per unit to complete these units so that they can besold for \$165 each.2. A new employee looks at the analysis and exclaims, “We’ll lose money with either ofthese alternatives! Let’s just throw these units in the trash!” Suppose the alternative totrashing is choosing the more profitable of the two alternatives (that the new employeelooked at and did not like). What effect will the trashing option (that the new employeewants) have on net income?A)Net income will increase by \$35 per unit foreach unit discarded.B)Net income will decrease by \$265 per unit foreach unit discarded.C)Net income will decrease by \$150 per unit for

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