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D Question 31 3.75 pts Sky Corporation inadvertently produced 10,000 defective digital watches. The watches cost $8 each to produce. A salvage company will purchase the defective units as they are for $3 each Gordon's production manager reports that the defects can be corrected for $5 per unit, enabling them to be sold at their regular market price of $12.50. Gordon should Sell the watches as they are because repairing them will cause their total cost to exceed their selling price Sell 5,000 watches to the salvage company and repair the remainder, Sell the watches for $3 per unit, Correct the defects and sell the watches at the regular price, Throw the watches away D Question 32 3.75 pts ABC provides the following sales forecast for the next three months July August September Sales Units 5,000 5,700 5,560 The company wants to end each month with ending finished goods inventory equal to 25% of the next month's sales. The finished goods inventory on June 30 is 1,250 units. The budgeted production units for August are: 6,950 5,665 7.090 4,135 Question 33 3.75 pts A company provided the following direct materials cost information Compute the total direct materials cost variance. Standard costs assigned Direct materials standard cost (405,000 units @ $2.00/unit) $810,000 Actual costs: Direct material costs incurred (403,750 units @ $2.20/unit $888.250 $80.750 Favorable $2.500 Favorable. $80.750 Unfavorable, $78.250 Unfavorable $78,250 Favorable