Pane Company manufactures controls that are used in its manufacturing of air conditioners. The controls can be purchased from another firm for $35 each. The controls cost Payne $40 per unit to produce, of which 15 percent is allocated fixed overhead cost. To analyze a make/buy decision for these controls, the relevant cost comparison is $40 and $35, and the controls should be purchased.

$40 and $35, and the controls should be manufactured.

$35 and $34, and the controls should be purchased.

35 and $34, and the controls should be manufactured. one of the answers above is correct.

This year Raymond Manufacturing shipped 1,500,000 pounds of products to customers at a cost of $1,200,000. If Customer Jones purchased 10,000 pounds of product generating $200,000 of revenue for Raymond Manufacturing, the mount of shipping cost that Acme should be assigned using the ABC approach is unable to determine form the data.

$8,000 ($0.80 per pound shipped).

$24,000 (2% of the total shipping costs).

$12,000 (1% of the shipping cost).

None of the answers above is correct.