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IMANET Exam CMA Topic 3 Question 59 Discussion

Actual exam question for IMANET's CMA exam
Question #: 59
Topic #: 3
[All CMA Questions]

Rosecrans Manufacturing produces kerosene lanterns. The Company can sell all of its output. Each unit sells for $120,and direct materials costing $48 per unit are added at the start of the frit operation. Other variable caste are immaterial. Production data for one of one of its products is presented below:

Rosecrans hires additional workers at a cost of $500,000 per year to expedite setups and materials handling in the bottleneck operation .As a result, the annual output of the bottleneck operation increases by 500 units. The Change in operating income Attributable to the increase in workers is

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Suggested Answer: C

Decentralization results in greater speed in making operating decisions because they are made by lower-level managers instead of being referred to top management. The quality of operating decisions should also be enhanced, assuming proper training of managers, because those closest to the problems should be the most knowledgeable about them.


Contribute your Thoughts:

Youlanda
21 days ago
Alright, let's do this! Time to put my accounting skills to the test and find the correct answer. No pressure, right?
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Marla
24 days ago
Hold on, I'm getting hungry just thinking about this. I wonder if Rosecrans makes any edible lanterns? Might be a good business opportunity.
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Virgina
4 days ago
A) $50,000
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Lashon
1 months ago
Ah, I see! So the variable costs are immaterial, which means the increase in output will directly translate to more revenue. Let's crunch the numbers.
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Dorsey
2 days ago
A) $50,000
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Noah
15 days ago
D) $(20,000)
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Leah
29 days ago
C) $(14,000)
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Linn
1 months ago
B) $36,000
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Portia
1 months ago
A) $50,000
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Daniel
2 months ago
I think the answer is C) $(14,000) because hiring additional workers increased costs more than the revenue generated.
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Chau
2 months ago
Hmm, this seems like a tricky one. I'll need to carefully calculate the impact of the increased production on the operating income.
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B) $36,000
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Evan
6 days ago
I think the additional workers will increase the operating income by $50,000.
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Sage
15 days ago
B) $36,000
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Patria
17 days ago
A) $50,000
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Emeline
29 days ago
A) $50,000
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Lourdes
2 months ago
I disagree, I believe the correct answer is B) $36,000.
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Josue
2 months ago
I think the answer is A) $50,000.
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