1. Kiwi Inc. is considering using stocks of an old raw material in a special project. The special project would require all 200 kilograms of the raw material that are in stock and that originally cost the company $2,500 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $10 per kilogram. However, the company has no other use for the raw material that is on hand and would sell it at the discounted price of $8 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $90 for all 200 kilograms. First, what costs are not relevant? Which cost is a sunk cost (is there one)? material when deciding whether to proceed with What is the relevant cost of the 200 kilograms of the raw the special project? 2. Orange Corporation produces and sells 13,000 units of Product X each month. The selling price of Product X is $20 per unit, and variable expenses are $14 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $75,000 of the $103,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. What is the annual financial advantage (or disadvantage) of discontinuing Product X? FOR DISCONTINUING SHOW YOUR WORK: FOR CONTINUING 3. A step that limits total output because it has the smallest capacity is called a bottleneck. What is another name for a bottleneck? 4. These are the per unit costs for a special order: 2,000 units will be sold for $17 each, and the company will need to invest in a stamping machine that will cost $1,500. None of the fixed MOH costs can be eliminated, but if the special order is accepted, variable MOH will increase by $2. Will incremental revenues exceed incremental costs for this special order? By how much