1.

A company is considering the purchase of a new machine for $58,000. Management predicts that the machine can produce sales of $17,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $7,000 per year including depreciation of $5,000 per year. The company's tax rate is 40%. What is the payback period for the new machine?

2.

Based on a predicted level of production and sales of 22,700 units, a company anticipates total variable costs of $102,150, fixed costs of $30,700, and operating income of $53,290. Based on this information, the budgeted amount of sales for 20,700 units would be:

3.

A company pays $24,000 per period to rent a small building that has 10,900 square feet of space. This cost is allocated to the company's three departments on the basis of the amount of the space occupied by each. Department One occupies 2,180 square feet of floor space, Department Two occupies 3,270 square feet of floor space, and Department Three occupies 5,450 square feet of floor space. If the rent is allocated based on the total square footage of the space, Department One should be charged rent expense for the period of:

4.

A company has two departments, Y and Z that incur delivery expenses. An analysis of the total delivery expense of $10,000 indicates that Dept. Y had a direct expense of $1,100 for deliveries and Dept. Z had no direct expense. The indirect expenses are $8,900. The analysis also indicates that 50% of regular delivery requests originate in Dept. Y and 50% originate in Dept. Z. Departmental delivery expenses for Dept. Y and Dept. Z, respectively, are:

5.

Chang Industries has 2,200 defective units of product that have already cost $14.20 each to produce. A salvage company will purchase the defective units as they are for $5.20 each. Chang's production manager reports that the defects can be corrected for $5.80 per unit, enabling them to be sold at their regular market price of $21.40. The incremental income or loss on reworking the units is: