q13 Yome Ltd manufacturers a number of specialised electronic components, including the advanced Pro Vmax. Yome Ltd has the capacity to produce 10,000 units of Pro Vmax per year. Currently it is operating at 80 per cent capacity. The selling price for Pro Vmax is $130 per unit. The variable cost per unit is $40. Fixed cost allocated to producing Pro Vmax is $300,000 per year. Yome Ltd receives a special order for 3,000 units of Pro Vmax. The opportunity cost associated with taking this special order is:

A.

$180,000

B.

$0

C.

$90,000

D.

$80,000

q14

In a make or buy decision

A.

the company would consider all fixed overhead costs to be irrelevant

B.

the company would consider the purchase price of the externally provided good to be

relevant.

C.

the company must choose between expanding or dropping a product line.

D.

the companymust choose between accepting or rejecting a special order.