Question
A local science museum normally sells tickets to its museum for $5 each. Variable costs are $1.00 per visitor and fixed costs are $3,000. A
A local science museum normally sells tickets to its museum for $5 each. Variable costs are $1.00 per visitor and fixed costs are $3,000. A local school group has approached the museum wishing to purchase 50 tickets at a reduced price of $2.00 each. If the school group's request is turned down, then the students will not visit the museum. Assuming the museum has sufficient capacity and that fixed costs remain unchanged, what is the change in net income if the special request was to be accepted?
TAD Company gathered the following data about the three products that it produces:
Present Estimated Additional Estimated Sales Product Sales Value Processing Costs if Processed Further Alpha $12,000 $8,000 $21,000 Beta 14,000 6,000 18,000
Delta 11,000 3,000 16,000
Which of the products should not be processed further?
Nelson Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials $130,000 Direct Labor 103,000 Variable Overhead 82,000 Fixed Overhead 62,000 If Nelson Inc. can purchase the component part externally for $345,000 and only $28,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?
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