Each multiple choice question is worth 2 points for a total of 40 points. 1) Costs that do not differ between alternatives are A) relevant to the decision B) considered opportunity costs C) considered irrelevant to the decision D) important only if they represent a material dollar amount 2) Smith Industries s considering rplacing mn Replacement Old Machine Machine $55,000 $46,000 Original cost Remaining useful life in years Current age in years $33,00 Book value $9,000 Current disposal value in cash Future disposal value in cash (in 5 years) Annual cash operating costs $8,000 p which of the formatione A) the sales price of the new machine B) the original cost of the old machine C) the current disposal value of the old machine Sail Makers manufactures sails for sailboats. The company has the capacity to produce currntly producing and selling 30,000 sails per year. The following information sails per year and is currently ates to current production: 51 Sales price per unit Variable costs per unit: Manufacturing Selling and administrative Total fixed costs: $675,000 $300,00 Manufacturing Selling and administrative a special pricing order is accepted for 5,600 sails at a sales price of $150 per unit, and fixed costs rem ged, what is the change in operating income? (Assume the special pricing order will require variable manufacturing costs and variable selling and administrative A) Operating income decreases by $840,000 B) Operating income increases by $840,000 C) Operating income decreases by $392,000 D) Operating income increases by $392,000 13) Paragon Products sells a special type of navigation equipment for $1,300. Variable costs are $800 unit. When a special order arrived from a foreign contractor to buy 42 units at a reduced sales price o $900 per unit, there was a discussion among the managers. The controller said that as long as the spe price was greater than the variable costs, the sale would contribute to the company's profits and shou be accepted as offered. The vice president, however, decided to decline the order. Which of the follov statements supports the decision of the vice president? A) The order is not likely to affect the regular sales. B) The company is operating at 70% of its production capacity. C) The variable costs of $800 includes variable costs of packing the product D) The company will need to hire additional staff to execute this order. 14) In deciding whether to drop its electronics product line, a company's manager should ignore A) the variable and fixed costs it could save by dropping the product line B) the revenues it would lose from dropping the product line C) the effect of dropping the electronics product line on the sales of its other products D) the amount of unavoidable fixed costs