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33) The Engine division provides engines to the Tractor division in a company. Engine division is currently producing below capacity. The following information pertains to Engine division. Market price Direct materials Direct labour Variable overhead Fixed overhead What would be the BEST transfer price to avoid transfer price problems? $1,350 $300 $900 $2,100 44) A computer firm has the following production costs for a component: direct materials $10, direct labour cost $25 and fixed overhead $5. A supplier offered to sell to the company the component at $34. The firm may consider buying the component if a the supplier is reliable b) the fixed cost is irrelevant. the additional cost, other than purchase price, is less than $1 All of the above.46) Sherpa Company manufactures tents and sleeping bags. Tents are priced at $80, have variable cost of $55, and direct fixed costs of $130,000. Sleeping bags are priced at $60, have variable cost of $35, and direct fixed costs of $66,000. Common fixed costs equal $70,000. Last year, the division sold 5,000 tents and 10,000 sleeping bags. Tents Sleeping Bags Total Sales $400,000 $600,000 $1,000,000 Less: Variable cost 275,000 350,000 625,000 Contribution margin $125,000 $250,000 $ 375,000 Less: Direct fixed overhead 130,000 66,000 196,000 Segment margin ($ 5,000) $184,000 $ 179,000 Less: Common fixed overhead 70,000 Operating income $109.000 If Sherpa stopped making tents, sales of sleeping bags will drop by 10%. What would operating income be if Sherpa stopped making tents? eage Increase by $89,000 Decrease by $20,000 Increase by $20,000 Increase by $89,00049) Elegance Bath Products, Inc. (EBP) makes a variety of ceramic sinks and tubs. The sinks sell for $150 each and have variable costs of $80. The tubs sell for $600 and have variable costs of $450. The ceramic sinks and tubs require the use of specialized molding equipment. The specialized molding equipment has 4,050 hours of capacity per year. A sink uses an average of 2 hours of specialized molding equipment time; a tub uses an average of 5 hours of specialized molding equipment time. Assume that EBP can sell as man},r as 1,000 sinks and 500 tubs per year. How man},r sinks and tubs should EBP produce respectively? 1,000 sinks; 410 tubs 1,000 sinks; 500 tubs 775 sinks; 500 tubs 775 sinks; 410 tubs