20 Janko Wellspring Inc. has a pump with a book value of $39.000 and a 4-year remaining life. A new, more efficient pump, is available at a cost of $60,000. Janko can also receive $9,500 for trading in the old pump. The new pump will reduce variable costs by $13,500 per year over its four-year life. The costs not relevant to the decision of whether or not to replace the pump are: Multiple Choice $54,000 $9.500 $13,500. $39,000 Shale Remodeling uses time and materials pricing. It is setting prices for next year using the following information: 19 Labor rate, including fringe benefits Annual labor hours Annual materials purchase Materials purchasing, handling, and storage Overhead for depreciation, taxes, insurance, etc. Target profit margin for both labor and materials $ 77 per hour 7,600 hours $1,336,250 $ 320,700 $ 858, 800 20 What should Shale set as rate per hour of labor hour? Multiple Choice $248 $200 18 Maxim manufactures a hamster food product called Green Health, Maxim currently has 19,000 bags of Green Health on hand. The variable production costs per bag are $3.80 and total fixed costs are $30,000. The hamster food can be sold as it is for $9.00 per bag or be processed further into Premium Green and Green Deluxe at an additional cost. The additional processing will yield 19,000 bags of Premium Green and 5,000 bags of Green Deluxe which can be sold for $8 and $6 per bag, respectively. The incremental revenue of processing Green Health further into Premium Green and Green Deluxe would be: 01:19:36 Multiple Choice $181,000 $11.000 $10,000 $10,000 O $1000 5.000 Epsilon Co. can produce a unit of product for the following costs: 17 Direct material Direct labor Overhead Total product costs per unit $ 7.30 23.30 36.50 $67.10 0119 29 An outside supplier offers to provide Epsilon with all the units it needs at $60.15 per unit. If Epsilon buys from the supplier, the company will still incur 30% of its overhead. Epsilon should choose to: Multiple Choice Buy since the relevant cost to make it is $6210 Make since the relevant cost to make it is $56.15