33. Our company has the capacity to produce 100,000 units per year. Normal production and sales are 75,000 units per year. The normal selling price is $12 per unit. At the 75,000 unit level of activity,costs per unit are as Direct Material Direct Labor Variable Overhead $2.25 Fixed Overhead $2.00 (5150,000 Annually) $1.75 $1.50 1.20 ($90,000 Annualy) $1.00 Variable Selling Due to a strike, our company is unable to purchase direct materials. The strike is expected to last for two months. The company has enough direct materials on hand to operate at 30% of normal activity for the two months. Or, our company could simply close down for the two months. If the plant is closed,fixed overhead would decrease by 40%, but fixed selling expenses would not change Sales and fired expenses are expected to ly and continuously throughout the year. Is the company better off or worse off by closing the plant for the two months, and by how much? a. $30,000 worse off b. $19,735 better off c. $10,625 worse off d. $19,375 worse off None of the above Average operating assets are $110,000 and net operating income is $23,100. The company invests $25,000 in new assets for a project that will increase net operating income by $4,750. What is the return on investment of the new project? a. 18.5% b.19% . 20% 34. 21% Tufts Corporation uses residual income to evaluate the performance of its divisions. The compa required rate of return is 11%. In March, the Commercial Products Division had $100,000 and net operating income of $9,400. What was the Commercial Products Division's residual income in March a. ($1,600) b. $%1,600 c. $%1,034 ny's minimum average operating assets of d. ($1,034) Nash Corporation manufactures and sells custom snowmobiles. From the time an order is placed till the time 6 the snowmobile reaches the customer averages 50 days. This 50 days is spent as follows 10 days 5 days 15 days 15 days 5 days Wait Time Move Time Process Time Queue Time nspection Time What is Nash's manufacturing cycle efficiency (MCE) for its snowmobiles? a. 30.0% b. 37.5% 40.0%