A condensed income statement for JMD Pools & Spas for Model TS7 for the past year is as follows: Sales Cost of Goods Sold Gross Profit $500,000 (300,000) 200,000 (240,000) |(40,000) Operating Expenses Operating Income It is estimated that 40% of the cost of goods sold represents fixed factory overhead costs and that 55% of the operating expenses are fixed. Model TS7 is one of many products that are produced and therefore, fixed costs will not be materially affected if management decides to discontinue the product. Should Model TS7 be discontinued or retained? How much richer or poorer will JMD be by making the correct decision? o Discontinue, $40,000 Richer Retain, $212,000 Richer O Retain, $248,000 Poorer o Discontinue, $212,000 Richer The management of Diamante's Sauce Factory is considering dropping their Salsa product line. The product line has revenue of $135,000, variable cost of goods sold of $70,000, fixed costs of $40,000 and variable operating expenses of $35,000, creating a loss from operations of $10,000. What is the differential profit or loss from discontinuing Salsa? O $65,000 loss 0 $10,000 profit 0 $30,000 loss 0 $30,000 profit During the month of April, Diamond's Pet Warehouse reported sales of $100,000, Cost of Goods Sold of $65,000, and total operating expenses of $30,000. What was Diamond's gross profit for the month of April? O $35,000 O $70,000 O $5,000 0 $100,000 Jackson Jackhammer Company is trying to decide whether to invest in a project that will require an initial investment of $100,000. Jackson estimates annual cash flows from the project as follows: year 1 $25,000, year 2 $30,000, year 3 $40,000, year 4 $10,000 and year 5 $15,000. Jackson is concerned about how long it will take to recover his investment. Determine in what year Jackson will recuperate is investment. 0 Year 3 0 Year 5 0 Year 4 0 Year 2 Joe's processing plant pasteurizes fruit juices. Orange and Apple juice are processed through a pasteurization operation that eliminates harmful bacteria. The processing plant is operating at full capacity and the pasteurization hours per unit is a constraint. Based on the following information, which statement is true? Per Gallon Data Sales Price Variable Cost Pasteurization hours per unit Orange Juice $100 $76 Apple Juice $80 $50 4 hours 6 hours o Orange Juice and Apple Juice are equally profitable O Neither Orange Juice or Apple Juice are profitable o Orange Juice is more profitable per bottleneck constraint than Apple Juice O Apple Juice is more profitable per bottleneck constraint than Orange Juice