A company that produces three products, M, N and O, is evaluating a proposal that will result in doubling the production of N and discontinuing the production of O. The facilities currently used to produce O will be devoted to the production of N. Furthermore, additional machinery will be acquired to produce N. The production of M will not be affected. All products have a positive contribution margin.

For the following phrase,selectthe most appropriate cost term.

Property taxes on new machinery:

Relevant variable outly cost.

Irrelevant fixed outlay cost.

Irrelevant variable outlay cost.

Relevant fixed outlay cost.

Georgia Manufacturing Company produces products A, B, C and D through a joint process. The joint costs amount to $250,000.

Product	Units Produced	Sales Value at Split-Off	Additional Costs of Processing	Sales Value after Processing
A	1,500	$20,000	$5,000	$30,000
B	2,500	$60,000	$6,000	$70,000
C	2,000	$40,000	$8,000	$50,000
D	3,000	$80,000	$12,000	$90,000

If C is processed further, profits of C will:

Northern Production Company has 200 labor-hours available. There is no limit on machine-hours. Northern can sell all of Y it wants, but it can only sell 20 units of X and Z, respectively.

Product X	Product Y	Product Z
Contribution margin per unit	$30	$20	$24
Labor-hours per unit	4	5	4
Machine-hours per unit	10	8	2

To maximize profits, how many units of Y should Northern produce?