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Problem 3: Incremental Analysis: #67-71 Question 67 (1.25 points) Keller Company manufactures a product with a unit variable cost of $155 and a unit sales

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Problem 3: Incremental Analysis: #67-71 Question 67 (1.25 points) Keller Company manufactures a product with a unit variable cost of $155 and a unit sales price of $255. Fixed manufacturing costs were $600,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 2,500 units at $195 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows: O Income would increase by $50,000. Income would increase by $100,000 Income would decrease by $100,000. O none of these Income would decrease by $50,000. Question 68 (1.25 points) Steeley Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials $120,000 Direct Labor $25,000 Variable Overhead $45,000 Fixed Overhead $30,000 If Steeley Manufacturing Company can purchase the component externally for $190,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision in order to maximize net income? O Make and save $5,000 Buy and save $15,000 Make and save $15,000 Buy and save $5,000 none of these Question 69 (1.25 points) Tsai Company gathered the following data about the three products that it produces: Present Estimated Additional Estimated Sales Product Sales Value Processing Costs if Processed Further Alpha $14,000 $2,000 $18,000 $15,000 $7,000 $21,000 Delta $20,000 $7,000 $29,000 Which of the products should not be processed further? Beta Product Delta Onone of these Products Alpha and Delta O Product Alpha Product Beta Ouestion 70 (1.25 points) Chunnel Company has three product lines, one of which reflects the following results: Sales $215,000 Variable expenses $125,000 Contribution margin $90,000 Fixed expenses $140,000 Net loss $(50,000) If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will O increase bag $50,000 increase by $6,000 decrease by $90,000 decrease by $6,000 none of these Question 71 (1.25 points) A company can produce and sell only one of the following two products: Machine Hours Contribution Required Per Unit Margin Per Unit Product 1 $35 Product 2 $50 If the company has machine capacity of 3,000 hours, what is the total contribution margin of the product it should produce in order to maximize net income? $78,500 $42,000 $105,000 $37,500 none of these

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