Dana Inc, manufactures electronic components for washing machines. One of its products is SC-96. The selling price and cost per unit data for SC-96 is as follows. Assume all non-unit level activity costs are insignificant. Per Unit Data Selling price $150 Direct materials 20 g Direct labor Variable manufacturing overhead I 12 Fixed manufacturing overhead 40 Variable selling and distribution To 3 Total costs 90 Operating margin $ 60 Assume the same facts as question 5 except that Dana now has an alternative use for its excess capacity. As an alternative to the special order for 1,000 units of SC-96, the company can produce 1,000 units of AU-64, which would generate total contribution margin of $10,000. The minimum unit price for this special, one-time SC-96 part order is now O $50 O $60 $70 $80 Which of the following qualitative factors favors the "drop" choice, in a keep vs. drop decision? Relations with laid off employees may be harmed. Idle capacity is available, Avoids price discrimination. O Escalation of commitment is avoided. Power Systems manufactures a variety of engines in its WI plant for the U.S. government on a cost-plus basis. The cost of a particular jet engine (JE500) is shown below. If production of this engine were discontinued, all JE500 laborers and the production supervisor would be laid off. Direct materials $200,000 Direct labor wages 150,000 Manufacturing overhead Supervisor salary Fringe benefits for direct labor 20.000 15,000 Depreciation on the WI plant & 12.000 Rent on the WI plant & equip. 11.000 Total manufacturing costs Esdo) $408.000 If Power Systems discontinued the production of JE500 in its WI plant, the quantitative impact of this decision includes a decrease in costs of $408.000 O $397,000 $385,000 $365,000