1 MC Qu. 47 Chang Industries has... Chang Industries has 1,800 defective units of product that have already cost $13.80 each to produce. A salvage company will purchase the defective units as they are for $4.80 each. Chang's production manager reports that the defects can be corrected for $6.20 per unit, enabling them to be sold at their regular market price of $20.60. The incremental income or loss on reworking the units is: Boints Multiple Choice eBook References $17.280 loss. $28,440 income. $11,160 loss O $25,920 income $17,280 Income. 2 MC Qu. 73 Lattimer Company had the following results... Lattimer Company had the following results of operations for the past year: 1 points Sales (15,600 units at $12.35) Variable manufacturing costs Fixed manufacturing costs Selling and administrative expenses (all fixed) Operating income $ 185,250 $102,750 26,250 41,250 (170,250) $ 15,000 eBook References A foreign company whose sales will not affect Lattimer's market offers to buy 5,700 units at $8.20 per unit. In addition to existing costs, selling these units would add a $0.32 selling cost for export fees. Lattimer's annual production capacity is 25,000 units. If Lattimer accepts this additional business, the special order will yield a: Multiple Choice $2.280 loss $9,804 loss $5,871 profit $4,104 loss $7,695 profit. MC Qu. 76 Paxton Company can produce a component of... 3 Paxton Company can produce a component of its product that incurs the following costs per unit direct materials, $10.10; direct labor. $14.10, variable overhead $3.10 and fixed overhead, $8.10. An outside supplier has offered to sell the product to Paxton for $35.40. Compute the net incremental cost or savings of buying the component 1 points Multiple Choice eBook DO O $0 cost or savings per unit References $3.10 cost per unit. $8.10 cost per unit. $3.10 savings per unit. O $8:10 savings per unit MC Qu. 70 Ahngram Corp. has... 4 Ahngram Corp. has 1,000 defective units of a product that cost $3.10 per unit in direct costs and $6.60 per unit in indirect cost when produced last year. The units can be sold as scrap for $4.10 per unit or reworked at an additional cost of $2.60 and sold at full price of $12.30. The incremental net income (loss) from the choice of reworking the units would be: 1 points Multiple Choice eBook ($2,600). References $0. $2,600. $4,100 $9,700