*please show calculations*

1. Soylent Green Company makes a variety of pet foods. The company is planning a promotional sales campaign for one of its pet food products. The campaign will last one month and the company has budgeted $120,000 for promotional activities. The following data have been assembled for purposes of deciding which of the product lines to select for the campaign.

(per unit)	Dog Food	Cat Food
Selling Price	$93.00	$98.00
Production Costs:
Direct Materials	16.00	22.00
Direct Labor	13.00	14.00
Variable Overhead	9.00	9.00
Fixed Overhead	5.00	4.00
Total Production Cost	43.00	49.00
Variable Selling Expenses	7.00	11.00
Fixed Selling Expenses*	13.00	10.00
Total Cost*	63.00	70.00
Operating Profit per Unit	30.00	28.00

* Does not include proposed promotional costs of $120,000

No increase in production facilities would be necessary to produce and sell the budgeted volume of dog food or cat food. The extra activity will not increase existing fixed costs or disrupt existing production in any way. Soylent Green anticipates that 3,500 additional units of dog food or 4,000 additional units of cat food could be sold due to the promotional campaign.

Soylent Green:

1. should promote cat food because the increase in total company income is greater than would be obtained by promoting cologne
2. should promote dog food because the increase in total company income is greater than would be obtained by promoting perfume
3. should promote neither product because the incremental unit sales volume would not yield enough benefit to cover the $120,000 promotional campaign costs
4. is indifferent between promoting either product

2. Riverview Lumber Company incurs variable costs of $25.00 per unit in producing its standard deck chair, which it sells for $60.00 per unit. Alternatively, Riverview can produce and sell deluxe model deck chairs at a price of $74.00 per unit. Deluxe model variable costs are $36.00 per unit. If Riverview decides to produce deluxe model deck chairs, the company will have to lease additional equipment at a cost of $25,000 per month. Riverviews existing fixed costs are $138,000 per month.

Riverviews standard model deck chair sales are 6,000 units per month. Management estimates that sales volume of deluxe model deck chairs would be 6,000 units per month. Riverview should: (pick best answer).

1. switch to deluxe model deck chairs because contribution margin is increased by $18,000.
2. switch to deluxe model deck chairs because income is increased by $18,000.
3. produce either standard or deluxe model deck chairs because its income is the same regardless.
4. continue to produce standard deck chairs because income is decreased by $7,000 if it produces deluxe model deck chairs.
5. switch to deluxe model deck chairs because the change would lower the companys breakeven point.

3. Buchanan Company has 15,000 obsolete model cell phones that are carried in inventory at a cost of $1,800,000. If these cell phones are upgraded at a total cost of $630,000, they can be sold for a total of $750,000. Alternatively, Buchanan can sell the cell phones in their present condition for $160,000.

The sunk cost in this situation is:

1. $750,000
2. $630,000
3. $1,800,000
4. $160,000
5. $2,430,000

Buchanan should:

1. should upgrade the cell phones because the net advantage of doing so is $120,000
2. should scrap the cell phones because the net advantage of doing so is $160,000
3. should keep the cell phones in inventory because pursuing either alternative would result in an unacceptable loss based on their original cost
4. should scrap the cell phones because the net advantage of doing so is $40,000