1.

The Hancock Manufacturing Company presently manufactures all component parts of its product-the Streamline Shower Head. The costs of manufacturing the mounting bracket for this product are:

	Material...........................	$ 6.00
	Labor..............................	5.60
	Fixed overhead.....................	1.40
	Variable overhead..................	2.00
	Total.............................	$15.00

The company has investigated the possibility of buying the mounting bracket from a subcontractor and has been quoted a price of $13.30 per unit. The relevant cost of manufacturing to be considered in deciding whether to buy the component instead of manufacturing it is:

Group of answer choices

$13.00

$6.00

$11.60

$13.60

2.

If a company operating at less than full capacity receives a special order request with a price less than total cost, the company should reject the request.

Group of answer choices

True

False

3.

Joint products should be processed after the split-off point only if the difference in expected selling price at the split-off point and after further processing exceeds the per unit cost of processing after the split-off point.

Group of answer choices

True

False

4.

Past costs incurred to create capacity are differential costs in future make or buy decisions.

Group of answer choices

True

False