5.

5 Dominik Corporation purchased a machine 5 years ago for $527,000 when it launched product MOBY. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 310 machine costing $545,000 or by a new model 240 machine costing $450,000. Management has decided to buy the model 240 machine. It has less capacity than the model 310 machine, but its capacity is sufficient to continue making product MOBY. Management also considered, but rejected, the alternative of dropping product MOBY and not replacing the old machine. If that were done, the $450,000 invested in the new machine could instead have been invested in a project that would have returned a total of $532,000. 0/3 In making the decision to buy the model 240 machine rather than the model 310 machine, the sunk cost was: points awarded Scored Multiple Choice O $545,000 O $450,000 O $527,000 X $532,0007 Tirri Corporation has provided the following Information: Cost per Unit Cost per Period Direct materials $ 7.55 Direct labor $ 3.95 0/3 Variable manufacturing overhead $ 1.60 points awarded Fixed manufacturing overhead $ 24, 500 Scored Sales commissions $ 1. 10 Variable administrative expense $ 0.65 Fixed selling and administrative expense $ 8,900 If the selling price is $28.20 per unit, the contribution margin per unit sold is closest to: Multiple Choice O $13.35 O $8.15 X $16.70 O $10.05