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9. What is the minimum r off point? A) $23,900 B) $40,300 C) $50,200 D) $14,000 10. Jordan Company budgeted sales of 400,000 calculators at
9. What is the minimum r off point? A) $23,900 B) $40,300 C) $50,200 D) $14,000 10. Jordan Company budgeted sales of 400,000 calculators at $40 per unit last year. Variable manufacturing costs were budgeted at $16 per unit, and fixed manufacturing costs at $10 per unit. A plant capacity to manufacture the additional quantity without incurring any additional fixed special order for 40,000 calculators at $23 each was received by Jordan in March Jordan has sufficient manufacturing costs; however, the production would have to be done on an overtime basis at an estimated additional cost of $3 per calculator. Acceptance of the special order would not affect Jordan's normal sales and no selling expenses would be incurred. What would be the effect on net operating income if the special order were accepted? A) $120,000 decrease B) $160,000 increase C) $240,000 decrease D) $280,000 increase Use the following to answer questions 11-12: The Talbot Company makes wheels that it uses in the production of bicycles. Talbot's costs to produce 100,000 wheels annually are: Direct materials Direct labor... Variable overhead. Fixed overhead $30,000 $50,000 $20,000 $70,000 An outside supplier has offered to sell Talbot similar wheels for $1.25 per wheel. If the wheels are purchased from e outside supplier, $15,000 of annual fixed overhead could be avoided and the facilities now being used could be ented to another company for $45,000 per year. 11. If Talbot chooses to buy the wheel from the outside supplier, then the change in annual net operating income due to accepting the offer is a: A) $35,000 increase B) $10,000 decrease C) $45,000 increase D) $70,000 increase 12. What is the highest price that Talbot could pay the outside supplier for the wheel and still be economically indifferent between making or buying the wheels? A) $1.70 B) $1.60 C) $1.55 D) $1.15
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