Falk Inc. has a machine with a book value of $50,000 and a five-year remaining life. A new machine is available at a cost of $85,000 and Falk can also receive $38,000 for trading in the old machine. The new machine will reduce variable manufacturing costs by $14,000 per year over its five-year life. Should the machine be replaced? no, because the income will decrease by $27,000 per year yes, because income will increase by $23,000 in total yes, because income will increase by $14,000 per year no, because the company will be $23,000 worse off in total Letter Systems Inc. has a limited amount of direct material available for products 1A1 and 2B2. Each unit of 1A1 has a contribution margin of $12 and each unit of 2B2 has a contribution margin of $30. A unit of 2B2 uses three times as much direct material as a unit of 1A1. What is Letter's most profitable sales mix, assuming there is unlimited demand for either product? Make all 2B2. Make all 141. Make equal number of units of 1A1 and 2B2. Make three times as many 1A1 as 2B2. Wildhorse Company sells its product for $10100 per unit. Variable costs per unit are: manufacturing, $5100; and selling and administrative, $130. Fixed costs are: $50400 manufacturing overhead, and $60400 selling and administrative. There was no beginning inventory at 1/1/20. Production was 36 units per year in 2020-2022. Sales were 36 units in 2020, 32 units in 2021, and 40 units in 2022. Income under absorption costing for 2022 is $78400. $84000. $72440 $77540