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hnson Company is considering discontinuing a product. The costs of the product consist of 20,000 fixed costs and $15,000 variable costs. The variable operating expenses related to the product total $4,000. How much would Johnson gain or lose from discontinuing the product? A $19,000. ? $15,000. C. $35,000. D. $39,000. Answer: A 2 Madden Company is considering disposing of equipment that has originally purchased for $200,000 and has $150,000 accumulated depreciation to date. The same equipment would cost $300,000 to replace. What is the sunk cost? A. $50,000 B. $150,000 C. $200,000 D. $310,000 3 Hancock, Inc. is considering spending $100,000 for a new grinding machine. This amount could be invested to yield a 12% return. What is the opportunity cost of spending the money on the grinding machine? A $112,000. B S88.000. C $12,000 D $100,000. Answer: C $12,000