Exercise 6-5A Opportunity costs LO 6-1 Norman Dowd owns his own taxt, for which he bought a $11.900 permit to operate two years ago. Mr. Dowd earns $35,700 a year operating as an independent but has the opportunity to sell the taxi and permit for $46,000 and take a position as dispatcher for Carter Taxi Co. The dispatcher position pays $37.000 a year for a 40-hour week. Driving his own taxi, Mr. Dowd works approximately 55 hours per week. If he sells his business, he will invest the $46,000 and can earn a 11 percent return. Required a. Determine the opportunity cost of owning and operating the independent business. b. Calculate the earnings of Norman Dowd operating as an independent and the earnings of Norman Dowd working as a dispatcher. Based solely on financial considerations, should Mr Dowd sell the taxi and accept the position as dispatcher? a. Opportunity cost b. Operating as an independent Working as a dispatcher Should Mr. Dowd sell the taxi and accept the position as dispatcher? Help Save & Exit Exercise 6-6A Special order decision LO 6-2 Rundle Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Rundle's normal sales territory, asks Rundle to pour 51 slabs for Lancing's new development of homes. Rundle has the capacity to build 400 slabs and is presently working on 100 of them. Lancing is willing to pay only $2,580 per stab. Rundle estimates the cost of a typical job to include unit-level materials, $850, unit-level labor, $590; and an allocated portion of facility-level overhead. $1210 Required Calculate the contribution to profit from the special order. Should Rundle accept or reject the special order to pour 51 slabs for $2,580 each? Contribution to profit Should Rundle accept or reject the special order