27. It costs Garner Company $12 of variable and 55 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 3,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 3,000 scales. If the special order is accepted, what will be the effect on net income? A) $6,000 decrease B) $45,000 increase C) $6,000 increase D) $9,000 decrease 28. At January 1, 2013, Deer Corp. has beginning inventory of 2,000 surfboards. Decr esti mates it will sell 10,000 units during the first quarter of 2013 with a 12% increase in sales each next quarter's sales. Each surfboard costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2013? A) $1,950,000 B) $1,881,600 C) $12,544 D) $450,000 quarter. Deer's policy is to maintain an ending inventory equal to 25% of the 29. The production budget shows expected unit sales are 100,000. The required production units are 104,000. What are the beginning and desired ending finished goods units, respectively? A) B) C) D) 10,000 10,000 6,000 4,000 4,000 6,000 10,000 10,000 30. Fixed costs are $2,400,000 and the contribution margin per unit is $150. What is the break-even point? A) 16,000 units B) $6,000,000 C) $16,000,000 D) 6,000 units 31. In a make-or-buy decision, which costs can be considered relevant? A) B) C) D) Incremental variable costs, incremental fixed costs, and opportunity costs Unavoidable variable costs, incremental fixed costs, and sunk costs Incremental variable costs, unavoidable fixed costs, and opportunity costs Incremental variable costs, incremental fixed costs, and sunk costs