1. Proposals O and K each cost $500,000, have 6-year lives, and have expected total cash flows of $720,000. Proposal O is expected to provide equal annual net cash flows of $120,000, while the net cash flows for Proposal K are as follows: Year 1 $250,000 Year 2 200,000 Year 3 100,000 Year 4 90,000 Year 5 60,000 Year 6 20,000 $720,000 Determine the cash payback period for each proposal. (10 pts) 2. Carillion Company is considering the disposal of equipment that is no longer needed for operations. The equipment originally cost $600,000 and accumulated depreciation to date totals $460,000. An offer has been received to lease the machine for its remaining useful life for a total of $290,000, after which the equipment will have no salvage value. The repair, insurance and property tax expenses during the period of the lease are estimated at $75,800. Alternatively, the equipment can be sold through a broker for $230,000 less a 10% commission. Prepare a differential analysis report, dated November 15 of the current year, on whether the equipment should be leased or sold. (10 pts) 3. Cell Plus Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The cost of producing and selling 5,000 units of cellular phones are as follows: (20 pts) Variable Costs: Fixed Costs: Direct Materials $125 per unit Factory Overhead $215,000 Direct Labor 45 Selling and admin exp. 75,000 Factory Overhead 40 Selling & admin exp 30 Total $240 per unit A. Cell Plus uses the product cost concept of applying the cost-plus approach to product pricing. a. Determine the total manufacturing costs and the cost amount per unit for the production and sale of 5,000 units of cellular phones. b. Determine the product cost markup percentage (rounded to two decimal places) for cellular phones. c. Determine the selling price of cellular phones. Round to the nearest dollar. B. Cell Plus uses the variable cost concept of applying the cost-plus approach to product pricing. a. Determine the variable costs and the cost amount per unit for the production and sale of 5,000 units of cellular phones. b. Determine the variable cost markup percentage (rounded to two decimal places) for cellular phones. c. Determine the selling price of cellular phones. Round to the nearest dollar. 7. Spruce Dairy Company manufactures three products whole milk, skim milk, and cream in two production departments, Blending & Packing. The factory overhead for Spruce Dairy is $270,000. The three products consume both machine hours and direct labor hours in the two production departments as follows: (30 pts) Direct Labor Hours Machine Hours Blending Department Whole Milk 270 790 Skim Milk 290 720 Cream 240 290 800 1800 Packing Department Whole Milk 330 460 Skim Milk 520 560 Cream 150 180 1,000 1,200 1,800 3,000 a. Determine the single plant-wide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. b. Determine the product factory overhead costs, using (a) the direct labor hours plant-wide factory overhead rate and (b) the machine hour plant-wide factory overhead rate. c. Determine the multiple production department factory overhead rates, using machine hours for the Blending Department and direct labor hours for the Packing Department