10. Stryker Industries received an offer from an exporter for 15,000 units of product at $17.50 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 $20 Unit manufacturing costs: Variable 11 Fixed 1 The amount of profit or loss from acceptance of the offer is a a.$97,500 profit b.$94,500 loss c.$37,500 loss d.$37,500 profit

12.

Starling Co. is considering disposing of a machine with a book value of $21,400 and estimated remaining life of five years. The old machine can be sold for $5,800. A new high-speed machine can be purchased at a cost of 72,600. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $22,500 to $20,000 if the new machine is purchased. The five-year differential effect on profit from replacing the machine is a(n)

a.increase of $70,590

b.decrease of $70,590

c.decrease of $54,300

d.increase of $54,300

21.

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales 7 hours; and Wales 1 hour.

The product with the highest contribution margin per machine hour is

a.Bales and Tales have the same contribution margin.

b.Tales

c.Wales

d.Bales

22.

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales 7 hours; and Wales 1 hour.

The contribution per machine hour for Wales is

a.$28

b.$35

c.$7

d.$17