Mock Test over Ch 7 & 9 Set C SESU ID;Name Printed: Q1. [30% of test] DeCesare Computers makes 5,200 units of a circuit board, CB76, at a cost of $270 each. Variable cost per unit is $180 and fixed cost per unit is $90. Peach Electronics offers to supply 5,200 units of CB76 for $250. If DeCesare buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining S70 per unit. Should DeCesare accept Peach's offer? Explain. Q2. [20% of test] A truck, costing $100,500 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $13,000 cash and replaced with a similar truck costing $103,000 or (b) rebuilt for $70,000 and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations. Q3. [20% of test] Inglenook Co. produces wine. The company expects to produce 300,000 two-liter bottles of Chablis in 2015. Inglenook purchases empty glass bottles from an outside vendor. Its target ending inventory of such bottles is 6,000; its beginning inventory is 5,000. For simplicity, ignore breakage. Compute the number of bottles to be purchased in 2015 04. [30% of test] The Howell Company has prepared a sales budget of30,000 finished units for a 3- month period. The company has an inventory of 9,000 units of finished goods on hand at December 31 and has a target finished goods inventory of 11,000 units at the end of the succeeding quarter. It takes 5 gallons of direct materials to make one unit of finished product. The company has an inventory of 56,000 gallons of direct materials at December 31 and has a target ending inventory of 66,000 gallons at the end of the succeeding quarter. How many gallons of direct materials should Howell Company purchase during the 3 months ending March 31