1 Green Company produces 1,000 parts per year, which are used in the assembly of one of its products. The unit product cost of these part is: Variable manufacturing cost Fixed manufacturing cost- Unit product cost $12e 92 $21-e The part can be purchased from an outside supplier at $20 per unit. If the part is purchased from the outside supplier, two thirds of the fixed manufacturing costs can be eliminated. The annual impact on the company's net operating income as a result of buying from the outside supplier would be:- (a) $1,000 increase (b) $2,000 increase (C) $2,000 decrease (d) None of the above. N If sales increase from $80,000 per year to $120,000 per year, and if the operating leverage is 5, then net operating income should increase by: (a) 250% (b) 300% (C) 334% (d) None of the above. 3 Dunklin Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,620 patient-visits and the actual level of activity was 1,540 patient-visits. The cost formula for administrative expenses is $3.20 per patient- visit plus $14,300 per month. The actual administrative expense was $21,050. In the clinic's flexible budget performance report for last month, the spending variance for administrative expenses was: (a) ( $1,488 (F) (b) $1,822 (U) (c) $2,318 (F) (d) None of the above. 7