17. Gleam Clean cleans and waxes floors for commercial customers. The company is presently working under capacity with equipment and men at times idle. The company recently received an order from a nonregular customer outside the company's normal geographical service region for a price of $90,000. The size of the proposed job is 22,000 square feet. The company's normal service costs are as follows: Unit-level materials Unit-level labor Unit-level variable overhead $.50 per square foot Product-level advertising costs Allocated at $1.50 a square foot Facility-level overhead If the company accepts the special offer, A) the company will lose $42,000 on the job B) the company will earn $42,000 on the job C) the company will lose $9,000 on the job D) the company will earn $9,000 on the job S1.75 per square foot S2.25 per square foot Allocated at S3 per square foot 18. FED COM is operating at 80% of its productive capacity. It is currently purchasing for S35 each a part used in its manufacturing operation. FED COM estimates it could make the part internally for a total cost of $40 per unit, consisting of $25 of unit-level production costs, S 5 of batch level costs, and S10 of facility-level costs that are currently attributed to other products. FED COM usually purchases 20,000 units of the part each year. These units could be manufactured using FED COM's excess capacity What is the differential increase or decrease in profit derived from making the part rather than purchasing it A) $50,000 profit increase B) S50,000 profit decrease C) $100,000 profit increase D) S100,000 profit decrease 19. All of the following statements describe qualities of relevance except A) Relevant information requires a high degree of precision. B) Relevant information is future oriented. C) Relevant information differs between the alternatives D) Relevant information includes qualitative as well as quantitative data 20. Select the correct statement regarding relevant costs and revenues. Avoidable costs are also known as sunk costs. Differential revenues are expected future revenues that do not vary between the alternatives under consideration. Sunk costs are relevant for decision-making purposes. To be relevant, a cost or revenue must be future-oriented and must differ between the alternatives A) B) C) D)