For Chapter 10 (Relevant Costing Make vs. Buy) Questions: Assume OH is 75% variable and 25% fixed Assume Selling Expense is 2/3 variable and 1/3 fixed Assume Admin Expense if 50% variable and 50% fixed For Chapter 11 (Capital Budgeting) Questions: Product Q Product R Sales Price/unit 22.00 20.00 Direct Material/unit 7.50 6.70 Direct Labor/unit 4.20 5.30 Variable OH/unit 4.30 4.00 MH/unit 2.00 1.00 Historical Costs unit Q 30,000 DM 7.70 231,000 DL 6.30 189,000 OH 10.00 300,000 selling expense 6.00 180,000 admin expense 2.60 78,000 total expense 32.60 978,000 Assume initial investment is $100,000 for all three projects: Project X Project Y Project Z Year Cash Flows Cash Flows Cash Flows 1 30,000 30,000 10,000 2 30,000 30,000 20,000 3 40,000 20,000 20,000 4 10,000 20,000 30,000 5 10,000 20,000 40,000 Also assume that cost of capital is 6.0% for all three projects