#1

Wilson Company is considering replacing equipment which originally cost $548,742.00 and which has $384,119.40 accumulated depreciation to date. A new machine will cost $840,337.00. Determine the sunk cost in this situation.

Select the correct answer.

$164,622.60

$840,337.00

$548,742.00

$675,714.40

#2

Win Co. Produces a single product. Its normal selling price is $27.00 per unit. The variable costs are $16.00 per unit. Fixed costs are $22,712.00 for a normal production run of 5,000 units per month. Win received a request for a special order that would not interfere with normal sales. The order was for 1,652 units and a special price of $21.00 per unit. Win Co. has the capacity to handle the special order and, for this order, a variable selling cost of $2 per unit would be eliminated.

Assuming the order is accepted, determine the impact on net income.

Select the correct answer.

increase of $11,564.00

increase of $37,085.96

decrease of $9,912.00

increase of $34,692.00