14. Mod Clothiers makes womens clothes. It costs $28 000 to produce 5 000 pairs of polka-dot polyester pants. They have been unable to sell the pants at their usual price of $50.00. The company is evaluating two alternatives. They could sell the pants as is for a total $15,000 or they could modify the pants and sell them for a total of $20,000.

At what cost to modify each pair of pants, would Mod Clothiers be indifferent between the two alternatives?

a. $1.00.

b. $0.75.

c. $0.50

d. $0.40

18. Pear Pty Ltd manufactures various lines of computer equipment. They are planning to introduce a line of laptop computers in January 2012. Current plans call for the production and sale of 1,000 computers with estimated production costs as follows.

21. Xeres Pty Ltd is considering whether to make or buy a component used in the production of Cyrus Machines. The annual cost of producing the 100,000 components used by the company is as follows.

Direct variable manufacturing costs	$300,000
Direct fixed manufacturing costs	$100,000
Allocated overhead	$50,000

If Xeres were to discontinue production of the component, direct fixed manufacturing costs would be reduced by 80 per cent.

Xeres should buy the 100,000 components if the cost of purchasing per unit is less than what amount?

a. $4.50

b. $4.00

c. $3.80

d. $3.20

e. $3.00

22. Classic Products reported $28,000 in net profit for the year using variable costing. The company had no units in beginning inventory, planned and actual production was 30,000 units, and sales were 25,000 units during the year. Variable manufacturing costs were $15 per unit and total budgeted fixed manufacturing overhead was $150,000. There was no under-applied or over-applied overhead reported during the year. Determine the net profit under absorption costing.

a. $28,000

b. $30,000

c. $3,000

d. $58,000

e. $53,000

PLZ explain me how to get that

Variable costs:
Manufacturing	$450,000
Selling and administrative	$100,000
Total variable costs	$550,000
Fixed costs:
Manufacturing	$300,000
Selling and administrative	$180,000
Total fixed costs	$480,000
Total costs	$1,030,000

The average amount of capital invested in the laptop computer line is $900,000 and Pears target return on investment for the line is 18 per cent. What is the mark-up percentage if the company uses total cost-plus pricing based on full cost?

a. 116.7%

b. 15.7%

c. 121.6%

d. 58.9%

e. 29.45%

e. $1.60