6. Which of the following is not involved in the sell or process further decision? A) Fixed costs B) Variable costs C) Opportunity costs D) Revenues 7. Pratt Company has old inventory on hand that cost $15,000. Its scrap value is $20,000. The inventory could be sold for $50,000 if manufactured further at an additional cost of $15,000. What should Pratt do? A) Sell the inventory for $20,000 scrap value B) Hold the inventory at its $15,000 cost C) Dispose of the inventory to avoid any further decline in value D) Manufacture further and sell it for $50,000 Book value of old equipment is considered to be a A) semi-relevant cost. B) cost that can be changed by a present or future decision. C) relevant cost. D) sunk cost. 8. 9. Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: New Machine $600,000 Old Machine 90,000 10 years $240,000 300,000 Price Remaining useful life 10 years $180,600 Useful life Annual operating costs If the old machine is replaced, it can be sold for $24,000. The net advantage (disadvantage) of replacing the old machine is A) S(6,000) B) $(60,000) C) $24,000 D) $18,000 10. It costs Lannon Fields $28 of variable costs and $12 of allocated fixed costs to produce an industrial trash can that sells for $60. A buyer in Mexico offers to purchase 3,000 units at $36 each. Lannon Fields has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income? A) Increase $24,000 B) Increase $12,000 C) Increase $108,000 D) Decrease $12,000