Piti Corp. makes and sells a product that normally sells for $34. Because of a defective machine, 1,000 units were not produced correctly and remain in inventory. Each of the defective unit has the following costs assigned to it by the company's absorption costing system: Direct materials Direct labor Variable Overhead Fixed Overhead $5.00 per unit $3.00 per unit $2.5 per unit $1.2 per unit The company has two options regarding the defective units: (1) be sold for $8 per unit, or (2) repaired and sold at the regular price. Q) What is the maximum cost of repair per unit in order for the company to choose option (2)? A) $ per unit Tunya Company's total production capacity is 4,500 units per month. Currently, the company plans to make and sell 4,000 units per month for the next 12 months. The company's sales manager, Mr. O, received an offer from a new customer to purchase 350 units at $96 per unit for the next five months. He is reluctant to accept this offer, because the normal selling price is $105. Also, the company's absorption costing system shows that manufacturing costs are $80 per unit, and selling costs are $16 per unit. The sales manager is concerned that the low offer price will not help the company cover its high manufacturing fixed costs. Q) Should the company accept the offer? A) No, because the company's ROI will most likely decrease. All of the other answers are incorrect. No, because the company will only break even on this offer. Yes, because operating income will most likely increase. Yes, because excess capacity will decrease