1. The condensed income statement for a business for the past year is presented as follows: Sales Less variable costs Contribution margin Less fixed costs Income (loss) from oper. $300,000 180.000 $120,000 50.000 $70,000 Product G $220.000 190.000 $ 30,000 50.000 S. (20,000) $340,000 220.000 $120,000 40.000 $ 80,000 Total $860,000 590.000 $270,000 140.000 $130,000 Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G? a $20,000 increase b. $30,000 increase c. $20,000 decrease d $30,000 decrease 3. A business is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $15 per unit. The unit cost for the business to make the part is $20, including fixed costs, and $12, not including fixed costs. If 30,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it? a $150,000 cost increase b. $ 90,000 cost decrease c. $150,000 cost increase d. $ 90,000 cost increase 4. Jones Co. can further process Product B to produce Product C. Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $60 per pound and would require an additional cost of $24 per pound to produce. What is the differential cost of producing Product C? a $30 per pound b. $24 per pound c. $28 per pound d. $60 per pound A business received an offer from an exporter for 10,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price Unit manufacturing costs: Variable Fixed 6. What is the differential revenue from the acceptance of the offer? a $200,000 b. $160,000 c. $130,000 d. $140,000 7. What is the differential cost from the acceptance of the offer? a $200,000 b. $160,000 c. $140,000 d. $130,000 8. What is the amount of gain or loss from acceptance of the offer? a. $30,000 gain b. $40,000 loss c. $30,000 loss d. $20,000 loss