1. The Company is preparing a proposal for a special order that requires 760 quarts of material A7. The company already has 600 quarts of this raw material (RM) on hand that originally cost the company $8.30 per quart. The Company uses Material A7 in its main product and restocks the RM from time to time. The resale value of the existing RM inventory is $7.65 per quart. New stock of the RM can be readily purchased for $8.40 per quart from outside suppliers. What is the relevant cost of the 760 quarts of the RM when deciding how much to charge for the special order?

2. The Company manufactures and sells 10,000 units of Product K each month. The selling price of Product K is $40 per unit and variable expenses are $32 per unit. Management has been trying to determine if Product c should be discontinued. Their analysis shows that $70,000 of the $120,000 in monthly fixed expenses charged to Product c would not be avoidable even if the product was discontinued. If Product C were to be discontinued, the annual financial advantage (or disadvantage) for the company of eliminating this product would be:

3.

One of Jereny, Inc.'s employees was recently involved in a car accident with one of the company's delivery trucks. The company is either going to repair the damaged truck or sell it as is and buy a comparable used truck. Information related to this decision is provided as follows:

Initial cost of the damaged truck $ 30,000 Accumulated depreciation to date on truck $ 18,000 Salvage value of truck immediately before crash $ 9,000 Salvage value of truck immediately after crash $ 1,000 Cost to repair damaged truck $ 5,000 Cost of a comparable used truck $ 10,000

Based on the given data above, Jereny would be financially better off