17. If the travel book line had been discontinued, corporate profits for the current year would c nnot be determined have decreased by: A) $35,000 C $14,000 D. $6,000 B) $13,000 Consider the following Level of Activity Total Cost Units of Activity 15,000 Lowest 10,000 5,000 Difference $6,000 18. Use the high-low method of cost estimation to solve for the fixed and variable cost portions of this cost and select the appropriate answer. A) Fixed cost: $6,000; variable cost: $1.20 per unit. B) Fixed cost: $22,000; variable cost: $2.20 per unit. Fixed cost: $10,000; variable cost $1.20 per unit. Fixed cost: $4,000; variable cost: $1.20 per unit. Alexis Corp. is considering the replacement of a machine that is presently used in production of its product. The following information is available: (Question 21 &22) 5.00ina 3 oobi Original Cost Useful Life Current age Book value Present Dispo sal Value Future Disposal Value Annual operating cost $35.0o0 10 5 25,00o 8,000 7.000 4.000 19. Ignoring taxes, what is the difference in cost between replacing it? A) $37,000 in favor of keeping the old machine B) $12,000 in favor of keeping the old machine C) 537,000 in favor of replacing the machine D) $12,000 in favor of replacing the machine keeping the old machine and Consider the following Level ofActivity | Total Cost Units of Activity Highest $28,000 10,000 Lowest 8,000 25,000 Difference 2,000 $3.000 20. Based on the information provided above, use the high-low method of cost estimation and determine the total cost at an activity level of 9,000 units. A) $26,500 C) $25,200 B) $26,000 D) $16,500 21. Jimmy is thinking of starting her own company. She thoughts that, if she leaves her current company, some of the company's present customers will go with her. The following information were provided Stay with Firm Start her own Practice $200,000 150,000 he revenues earned from the startup of her own firm are the result of the clients that came from her old firm. Operating costs include telephone, office supplies, rent, etc. What is the opportunity cost of starting her own practice? A) $50,000 C) $150,000 Operating costs B) $200,000 D) 0
