i) Indigo company had 27,000 units in production during May. Of these 27,000 units, 25,000 units were started during the month. By the end of May, 23,000 units were completed and transferred to finished goods. Cost associated with the beginning inventory was 125,000. Manufacturing costs totalling 850,000 were added during the period. Indigo uses the FIFO method and adds all direct materials at the beginning of the process. Indigo's cost per unit for direct materials was: a) 34.00 b) 39.00 c) 42.39 ii) d) 36.96 Planet Company had the following historical accounting data per unit for Division A: Direct materials 60 Direct labour 30 Variable overhead 15 Fixed overhead 24 Variable selling expenses 45 Fixed selling expenses 9 The units are normally transferred internally from Division A to Division B. The units also may be sold externally for 210 per unit (after incurring the 45 variable selling expenses per unit, detailed above). The minimum profit level accepted by the company is a mark-up of 30 per cent. There were no beginning or ending inventories. If Division A has enough excess capacity to supply the number of units needed by Division B, the minimum transfer price acceptable by Division A would be: a) 150 b) 210 c) 105 iii) d) 129 The widget division of ABC Company wants to increase its ROI from 20 per cent to 25 per cent in the current year. They cannot increase net operating income and sales from the previous year's levels of 60,000 and 1,000,000, respectively. To increase ROI, ABC should: a) make additional investments of 60,000 b) sell obsolete inventory for 60,000 c) sell obsolete inventory for 60,000 and use the proceeds to pay off debts d) ABC can't increase ROI.