1.Upstream costs for a merchandising entity include:

i. design

ii. research and development

iii. distribution

iv. customer support

Select one:

a.iii and iv

b.i, ii and iii

c.i and iii

d.None of the given answers

2.Zin Clothiers makes women's clothes. It costs $28,000 to produce 5,000 pairs of polka-dot polyester pants. They have been unable to sell the pants at their usual price of $50.00. The company is evaluating two alternatives. They could sell the pants 'as is' for a total of $15,000 or they could modify the pants at a cost of $3,000 and sell them for a total of $20,000. What would be the effect on profit of modifying the pants and selling them as opposed to selling 'as is'?

Select one:

a.$3,000 increase

b.$2,000 increase

c.$11,000 decrease

d.$8,000 decrease

3.When excess capacity exists, the only relevant cost associated with a special order will usually be which cost?

Select one:

a.Administrative cost

b.Variable cost

c.Allocated fixed cost

d.Fixed cost