15) Green Company produces 1,000 parts per year, which are used in the assembly of one of its products. The unit product cost of these parts is:

Variable Manufacturing Cost $13

Fixed Manufacturing Cost $9

Unit Product Cost $22

The part can be purchased from an outside supplier for $20 per unit. If the part is purchased from the outside supplier, one-third of the fixed manufacturing costs can be eliminated. What will be the annual impact on the company's operating income of buying the part from the outside supplier?

16) The following data pertain to activity and utilities costs for two recent years:

Year 2 Year 1

Activity Level in Units 12,000 8,000

Utilities Cost $15,800 $12,200

Using the high-low method, what is the cost function for utilities?

20)The manufacturing capacity of Jordan Company's facilities is 30,000 units a year. A summary of operating results for last year follows:

Sales (18,000 units @ $100) $1,800,000

Variable Costs $954,000

Contribution Margin $846,000

Fixed Costs $495,000

Operating Income $351,000

A foreign distributor has offered to buy 14,000 units at $90 per unit next year. Jordan expects its regular sales next year to be 18,000 units. If Jordan accepts this offer and rejects some business from regular customers so as not to exceed capacity, what would be the change in total operating income of accepting the special order? (Assume that the total fixed costs would be the same no matter how many units are produced and sold.)

22) Green Spaces 4 U is a gardening company. It provides a variety of services to homeowners: mowing, weeding, tree trimming, installation of sprinkler systems, leaf blowing and removal and flower bed creation. Its bread and butter service is, of course, lawn mowing. Clients for this service pay the same amount every month. The amount of the contract is set at the beginning of the relationship based on the size of the property.The most lucrative of its offerings is the sprinkler installations, so it is marketed agressively with existing clients as well as potential new clients. This service is charged for on a one-time, individualized basis. A partial static budget for the month of November follows:

Budget Actual Variance

Total clients 3,400 3,600 200

Lawn mowed 8,500 8,260 240

Variable costs

Travel for lawn mowing $238,000 $254,300 $16,300

Wages for lawn mowing1 27,500 155,520 28,020

What would be the flexible budget variance for travel costs for lawn moving?