23.

Jordan Company is considering the purchase of a machine with the following data:

Initial cost	$150,000
One-time training cost	12,000
Annual maintenance costs	15,000
Annual cost savings	75,000
Salvage value	20,000

The cash payback period is

A)

2.70 years.

B)

2.50 years.

C)

2.37 years.

D)

2.17 years.

2. Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent:

Direct materials	$8,400
Direct labor	11,250
Variable overhead	12,600
Fixed overhead	16,200

An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.

If Clemente accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3,600. The increase (decrease) in net income from accepting the offer would be

A.

$150.

B.

$7,350.

C.

$(150).

D.

$(3,600).

3.	Janssen Company has old inventory on hand that cost $24,000. Its scrap value is $32,000. The inventory could be sold for $80,000 if manufactured further at an additional cost of $24,000. What should Janssen do?
	A)	Sell the inventory for $32,000 scrap value
	B)	Dispose of the inventory to avoid any further decline in value
	C)	Hold the inventory at its $24,000 cost
	D)	Manufacture further and sell it for $80,000.

4.

Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected:

	Old Equipment		New Equipment
Purchase price	$225,000	$375,000
Accumulated depreciation	90,000	- 0 -
Annual operating costs	300,000	240,000

If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years.

The net advantage (disadvantage) of replacing the old equipment with the new equipment is

A)

$60,000

B)

$(15,000)

C)

$(75,000)

D)

$90,000

7.

Carlos Consulting Inc. provides financial consulting and has collected the following data for the next year's budgeted activity for a lead consultant.

Consultants' wages		$90,000
	Fringe benefits	$22,500
	Related overhead	$17,500
Supply clerk's wages		$18,000
	Fringe benefits	$4,000
	Related overhead	$20,000
Profit margin per hour		$20
Profit margin on materials		15%
Total estimated consulting hours		5,000
Total estimated supply costs		$168,000

A consulting job takes 20 hours of consulting time and $180 of supplies. The client's bill would be

A)

$1,172.

B)

$772.

C)

$952.

D)

$1,100.

.

8.	The Can Division of Fruit Products Inc. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and unit fixed costs are $0.24 and $0.08, respectively. The Packaging Division wants to purchase 50,000 cans at $0.32 a can. Selling internally will save $0.02 a can. Assuming the Can Division has sufficient capacity, what is the minimum transfer price it should accept?
	A)	$0.24
	B)	$0.32
	C)	$0.22
	D)	$0.30

9.	If there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 410,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?
	A)	350,000 pounds
	B)	530,000 pounds
	C)	290,000 pounds
	D)	470,000 pounds

10.	The production budget shows expected unit sales of 32,000. Beginning finished goods units are 3,600. Required production units are 33,600. What are the desired ending finished goods units?
	A)	2,000
	B)	3,600
	C)	6,400
	D)	5,200

please show work