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18. What do you subtract from the sales price per unit to compute the unit contrbution margin? a) total fixed cost per unit b) total
18. What do you subtract from the sales price per unit to compute the unit contrbution margin? a) total fixed cost per unit b) total variable cost per unit c) total administrative cost per unit d) do not subtract anything e) None of the above. 19. The entry to adjust for over applying overhead may include: a) Credit to Cost of Goods Sold b) Debit to Cost of Goods Sold. c) Credit Raw Materials d) Debit Factory Labor e) Both "a" and "d 20. Patrick Corporation inadvertently produced 10 each to ,000 defective personal radios. The radios cost $8 produce. A salvage company will purchase the defective units as they are for $3 each. Patrick's production manager reports that the defects can be corrected for $5 per unit m to be sold at their regular market price of $12.50. Patrick should a) Sell the radios for $3 per unit. b) Correct the defects and sell the radios at the regular price. c) Sell the radios as they are because repairing them will cause their total cost to exceed their selling price. d) Sell 5,000 radios to the salvage company and repair the remainder. e) Throw the radios away 21. Daniels Corporation is considering the purchase of new equipment costing $30,000. The projected annual after-tax net income from the equipment is $1,200, after deducting $10,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of three years and no salvage value Daniels requres a 12% return on its investments. What is the net present value of the machine? a) $24,018 b) $(3, 100) c) $30,000 d) $26,900 e) $(29,520) 22. Beta Inc. can produce a unit of Zed for the following costs: Direct material Direct labor Overhead Total costs per unit $10 20 50 $80 An outside supplier offers to provide Beta with all the Zed units it needs at $58 per unit If Beta buys from the supplier, it will still incur 40% of its overhead. Beta should. a) Buy Zed since the relevant cost to make it is $60 b) Make Zed since the relevant cost to make it is $60. c) Buy Zed since the relevant cost to make it is $80. d) e) Make Zed since the relevant cost to make it is $30 Buy Zed since the relevant cost to make it is $30
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