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Question 2 (1 point) Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm making $2,900 per month. (2) Take a summer class which will cost $800 and work half time making $1,100 per month. (3) Take a class at a cost of $800 and not work at all during the summer. Elroy's incremental profit or loss if he chooses option 2 over option 1 would be Question 3 (1 point) Triton Company's copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the expected activity of copies: Salaries (fixed) Employee benefits (fixed) Depreciation of copy machines (fixed) Utilities (fixed) Paper (variable, 1 cent per copy) Toner (variable, 1 cent per copy) $88,750 10,000 10,000 5,000 50,000 50,000 The costs are assigned to two cost pools, one for fixed and one for variable costs. The costs are then assigned to the sales department and the administrative department. Fixed costs are assigned on a lump-sum basis, 40 percent to sales and 60 percent to administration. The variable costs are assigned at a rate of 2 cents per copy. Assuming the following copies were made during the year, 2,726,750 for sales and 2,552,250 for administration, calculate the copy department costs allocated to sales. Question 5 (1 point) Mama Italiano Sauce is in the process of preparing a production cost budget for May. The actual costs in April were: Mama Italian Sauce Production Cost Budget April 2008 Production - Jars of 20,000 sauce Ingredient cost (variable) $16,000 Labor cost (variable) 9,000 Rent (fixed) 4,000 Depreciation (fixed) 6,000 Other (fixed) 1,000 Total $36,000 Using this information, prepare a budget for May stating the total amount for the May budget. Assume the budget will increase to 25,500 jars of sauce reflecting anticipated sales increase related to a new marketing campaign Question 6 (1 point) Consider the production cost information for Mama Italiano Sauce given below: Mama Italian Sauce Production Cost Budget April 2008 Production - Jars of sauce 20,000 Ingredient cost (variable) $16,000 Labor cost (variable) 9,000 Rent (fixed) 4,000 Depreciation (fixed) 6,000 Other (fixed) 1,000 Total $36,000 The company is currently producing and selling jars of sauce The jars of sauce sell for $4 per jar. The company is considering lowering the price to $3.70 per jar. Suppose this action will increase sales. What is the incremental costs associated with producing an extra 54,500 jars of sauce? Question 7 (1 point) Consider the production cost information for Mama Italiano Sauce given below: Mama Italiano Sauce Production Cost Budget April 2008 Production - Jars 20,00 of sauce 0 Ingredient cost (variable) $16,0 00 Labor cost (variable) 9,000 Rent (fixed) 4,000 Depreciation (fixed) 6,000 Other (fixed) 1,000 Total $36,0 00 The company is currently producing and selling 250,000 jars of sauce annually. The jars of sauce sell for $4 per jar. The company is considering lowering the price to $3.60 per jar. Suppose this action will increase sales to 324,000 jars of sauce. What is the incremental revenue associated with the price reduction of sauce