17. Carnival Corp. is considering selling its old popcorn machine and replacing it with a newer one. The old machine originally cost $5,000 and has been fully depreciated. Annual costs are $4,000. A high school is willing to buy it for $2,000. New equipment would cost $18,000 and annual operating costs would be $1,500. Both machines have an estimated useful life of 5 years. a. Stay with the old equipment $3,500 less in net costs b. Purchase the new equipment $3,500 cost savings c. Purchase the new equipment - deduction in costs $14,500 d Stay with the old equipment - cost savings of $2,000 18. Safe Security Company manufacturers home alarms. Currently it is manufacturing one of its components at a variable cost of $45 and fixed costs of $15 per unit. An outside provider of this component has offered to sell Safe Security the component for $50. Determine the best plan and calculate the savings a. $5 savings per unit - Manufacture b. $5 savings per unit - Purchase c. $10 savings per unit - Manufacture d. $15 savings per unit - Purchase 19. Managers who often make special pricing decisions are more likely to use which of the following cost concepts in their work? a Total cost b. Product cost c. Variable cost d. Fixed cost McClelland Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. McClelland desires a profit equal to a 21% rate of return on invested assets of $600,000, Fixed factory overhead cost Fixed selling and administrative costs Variable direct materials cost per unit Variable direct labor cost per unit Variable factory overhead cost per unit Variable selling and administrative cost per unit $37,500 7.500 4.50 1.88 1.13 4.50 20. The dollar amount of desired profit from the production and sale of the company's product is: a $126,000 b. $67,200 c. $73,500 d. $96,000 21. The cost per unit for the production and sale of the company's product is: a $12 b. $12.76 c. $15 d. $13.50 22. The markup percentage for the company's product is: a. 21.0% b. 16.5% c 15.7% d. 24.0% 23. The unit selling price for the company's product is: a $15.00 b. $13.82 c. $14.86 d. $14.76