Lusk Corporation produces and sells 16,200 units of Product X each month. The selling price of Product X is $32 per unit, and variable expenses are $26 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $72,000 of the $112,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product should be Multiple Choice ($57,200) $14,800 $54,800 ($54,800) A study has been conducted to determine if Product A should be dropped. Sales of the product total $500,000, variable expenses total $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be Multiple Choice ($10,000) $10,000 ($50,000) $50,000 Selling price per unit Variable cost per unit Minutes on the constraint LN JO RQ $168.60 $364.65 $466.74 $127.08 $287.27 $339.44 2.40 5.30 9.50 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places.) Multiple Choice LN, JQ, RQ RQ, LN, JQ RQ, JQ, LN JQ, RQ, LN The Wyeth Corporation produces three products, A, B, and C, from a single raw material input Product A can be sold at the splitoff point for $40,000, or it can be processed further at a total cost of $15,000 and then sold for $58,000. Joint costs total $60,000 annually. Product A should be: Multiple Choice discontinued because revenues after further processing are less than total joint costs. sold at the split-off point O processed further and then sold processed further only if its share of the total joint costs is less than the incremental revenues from further processing Two alternatives, code named X and Y, are under consideration at Guyer Corporation Costs associated with the alternatives are listed below. Materials costs Processing costs Equipment rental Occupancy costs Alternative Alternative Y $ 45,000 $ 65,300 $ 49,400 $ 49,400 $ 18,400 $ 18,400 $ 17,600 $ 26,100 What is the financial advantage (disadvantage) of Alternative Y over Alternative X? Multiple Choice $(144,800) $130,400 $159,200 The Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total cost of $26,800. If these calculators are upgraded at a total cost of $10,000, they can be sold for a total of $30,000. As an alternative, the calculators can be sold in their present condition for $11,200. The sunk cost in this situation is: Multiple Choice $10,000 $26.800 $11.200 $0 Sales $150,000 Variable expenses $ 72,000 Fixed manufacturing expenses $ 50,000 Fixed selling and administrative expenses $ 33,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $30,000 of the fixed manufacturing expenses and $13,000 of the fixed selling and administrative expenses are avoidable if product V860 is discontinued. What would be the financial advantage (disadvantage) from dropping product V860? Multiple Choice ($35,000) ($5,000) $35,000 $5,000 Penagos Corporation is presently making part 243 that is used in one of its products. A total of 5,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Per Unit $1.10 $3.10 $6.90 $5.80 $5.20 $5.60 An outside supplier has offered to produce and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided. If management decides to buy part 243 from the outside supplier rather than to continue making the part, what would be the annual financial advantage (disadvantage)? Multiple Choice ($34,500) Selling price per unit Variable cost per unit Minutes on the constraint VD JT SM $344.85 $415.40 $119.32 $270.18 $310.88 $ 91.96 5.70 6.70 1.90 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized (Round your intermediate calculations to 2 decimal places.) Multiple Choice O JT, SM, VD JT, VD. SM VD, SM, UT SM, VD, JT