1. Abel Company produces three versions of baseball bats: wood, aluminum, and are rubber. A condensed segmented income statement for a recent period follows: Sales Wood Aluminum Variable expenses $500,000 Hard Rubber $200,000 Total Contribution margin 325.000 $ 65,000 140,000 $765,000 58.000 Fixed expenses 175.000 60,000 523.000 75.000 Net income (loss) 7,000 35.000 242,000 $100,000 22.000 $25.000 132.000 SU15.000) Assume none of the fixed expenses for the hard rubber line are avoidable. What will S110,000 be total net income if the line is dropped? A. S125,000 B. S105.000 C. $103.000 D. $140,000 18. The process of evaluating financial data that change under alternative courses of action is called A) incremental analysis. C. Double entry analysis. B) contribution margin analysis. D. cost-benefit analysis. 19. Opportunity cost is usually A) a standard cost. B) a potential benefit. C. a sunk cost. D. included as part of cost of goods sold. 20. Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials $120,000 25,000 Direct Labor 45,000 Variable Overhead 30,000 Fixed Overhead If Tex's Manufacturing Company can purchase the component externally for $190,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? a. Buy and save $5,000 b. Make and save $5,000 c. Make and save $15,000 d. Buy and save $15,000