Q1:

Starling Co. is considering disposing of a machine with a book value of $23,900 and estimated remaining life of five years. The old machine can be sold for $5,800. A new high-speed machine can be purchased at a cost of 73,200. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,200 to $20,500 if the new machine is purchased. The differential effect on income for the new machine for the entire five years is

increase of $53,900

decrease of $70,070

increase of $70,070

decrease of $53,900

Q2:

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales, 7 hours; and Wales 1 hour. Which product has the highest contribution margin per machine hour?

a.Bales

b.Tales

c.Wales

d.Bales and Tales have the same

Q3:

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales, 7 hours; and Wales 1 hour. What is the contribution margin per machine hour for Bales?

a.$7

b.$5

c.$35

d.$28

Q4:

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales, 7 hours; and Wales 1 hour. What is the contribution margin per machine hour for Tales?

a.$7

b.$35

c.$4

d.$28

Q5:

Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales, 7 hours; and Wales 1 hour. What is the contribution per machine hour for Wales?

a.$17

b.$35

c.$28

d.$7

Q6:

Crane Company Division B recorded sales of $71,900, variable cost of goods sold of $50,300, variable selling expenses of $19,500, and fixed costs of $12,600, creating a loss from operations of $10,500.

Determine the differential income or loss from the sales of Division B. Enter a loss as a negative number. $

Should this Division B be discontinued? (If the answer to above part is negative, select "Yes".)

(YES OR NO?)