21. In a make-or-buy decision, which of the following is an incremental cost? a. Manufacturing direct labor b. Depreciation on plant equipment c. Supervisors salaries d. Advertising cost 22. Sweet Cocoa produces chocolate svrup used by candy companies. Recently. the company has had excess capacity due to a forejan supplier entering its market. Sweet Cocoa is currently bidding on a potential order from Kilwin's Candy for 5,000 cases of syrup. The estimated cost of each case is $43.00, as follows: direct material, $12.00; direct labor, $10.00; and manufacturing overhead, $21.00. The manufacturing overhead is composed 40% of variable costs and 60% of fixed costs. Should Sweet Cocoa bid on the Kilwin's Candy business at $35.00 per case? a. No, because the incremental loss will be $8.00 per case b. Yes, because the incremental profit will be $4.60 per case C. No, because there are too many qualitative considerations d. Yes, because the incremental profit will be $10.90 per case 23. Which method provides an incentive for managerss to produce more units in order to increase income for performance evaluations? a. Full costing b. Variable costing c. Both full costing and variable costing d. Neither full costing nor variable costing 24. Generally accepted accounting principles require a. An absorption costing income statement b. A fixed income statement c. A contribution margin income statement d. A flexible income statement