1,Chang Industries has 2,900 defective units of product that already cost $32 each to produce. A salvage company will purchase the defective units as is for $14 each. Chang's production manager reports that the defects can be corrected for $24 per unit, enabling them to be sold at their regular market price of $30. The $32 per unit is a:

Multiple Choice

• Period cost.

• Incremental cost.

• Out-of-pocket cost.

• Sunk cost.

• Opportunity cost.

6, Factor Co. can produce a unit of product for the following costs:

Direct material	$	8.10
Direct labor		24.10
Overhead		40.50
Total product cost per unit	$	72.70

An outside supplier offers to provide Factor with all the units it needs at $42.35 per unit. If Factor buys from the supplier, the company will still incur 70% of its overhead. Factor should choose to:

Multiple Choice

• Buy since the relevant cost to make it is $60.55.

• Buy since the relevant cost to make it is $32.20.

• Buy since the relevant cost to make it is $44.35.

• Make since the relevant cost to make it is $32.20.

• Make since the relevant cost to make it is $44.35.

16, Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,130,000; sales of $4,555,000; cost of goods sold of $2,580,000; and operating expenses of $1,402,000. Compute the division's return on investment:

Multiple Choice

• 12.58%.

• 29.01%.

• 9.57%.

• 13.87%.

• 22.21%.