e.m u.edu u/convery/ACC9620202%20FS15%20and%20beyond/CH962008%20Relevant 620Costs/FS15%208-2.problem?symb uploaded%2 Reade es products only $770,000 of honey sucker's fixed expenses (the majority of which is advertising) will be eliminated if the product line is discontinued. If the company decides to discontinue the product line, how much will the company's operating income increase or decrease? Enter an increase as a positive number and a decrease as a negative number. Submit Answer Tries 0/10 Answer questions 3 and 4 with the following information Wentzloff Inc. packages musical instrument repair kits for elementary and high school music programs. Cost data for this packaging process is as follows: Annual Cost Unit Cost Packaging materials (e.g., boxes and bubble-wrap) $2.099 $304,500 Packaging direct labor $0.644 93,420 $62,330 Indirect materials (e.g., tape, labels) $0.430 $0.366 Packaging supervision (variable) 53,070 Other fixed manufacturing overhead 205,200 414 Total packaging cost $4.952 $718,520 An outside supplier has offered to do all the packaging for a price of $4 per unit for all packaging-related activities if Wentzloff signs a one (not two) -year contract for a minimum of 145,100 units produced each year. Wentzloff could use the factory space now occupied by the packaging process to expand production to another product line. This expansion is expected to generate an additional $175,000 in profit per year. 3. What are the total relevant costs of continuing to package the products internally; that is, which of the annual costs are avoidable if Wentzloff outsources the packaging process? (1 point) Submit Answer Tries 0/10 4. What is the net cost from outsourcing the packaging process after considering the profit from expanding production of another product? (1 point) Submit Answer Tries 0/10 5. Walker Company is under a time constraint and can only fully produce one product this period. Which of the following products should be fully produced to yield the highest profits for the company? A) Product A has a contribution margin of $20 and it takes 2 machine hours to complete each product. or B) Product B has a contribution margin of $30 and it takes 2 machine hours to complete each product. o C) Produ ct C has a contribution margin of $50 and takes 4 machine h o complete each product. Ou Submit Answer Tries 0/10 This discussion is closed. Send Feedback
