Question 1: AP Manufacturing is deciding whather to keep or replace an old machine. It obtains the following AP Manufacturing uses straight-line depreciation. gnore the time value of money and income taxes. Should AP replace the old machine? Bas quantitative and possible qualitative considerations. Question 2 The Cozzy Company manufactures slippers and normally sells them at $10.00 a pair in he Ontario market. Variable manufacturing cost is $5.75 a pair, variable selling costs are $0.26 per pair and allocated fixed manufacturing cost is $1.75 a pair. It has enough idle capacity available to accept a one-time-only special order of 25,000 pairs of slip marketing costs as a result of the special order, but will be responsible for shipping the batch of slippers at a cost of $1,200. Should they accept this special order? Base your recommendation on both quantitative and possible qualitative considerations.......Page Break Question 3 Nelson River Tours, a division of Old World Travel, offers two types of guided fishing tours, Beginner and Advanced. Operating income for each tour type in 2017 is as follows: The equipment has a zero disposal value. Guide wages, supplies, and vehicle fuel are ariable costs with respect to the number of tours. Administrative salaries are fixed costs with respect to the number of tours. Dennis Baldwin, Nelson River Tours president, is concerned about the losses incurred on the Advanced tours. He considering dropping the Advanced tour and offering only the Beginner tour, 1. If the Advanced tours are discontinued, one administrative position could be eliminated, saving the company $80,000. Assuming no change in the sales of Beginner tours, what effect would dropping the Advanced tour have on the company's operating income? 2. Refer back to the original data. If Nelson River Tours drops the Advanced tours, Baldwin estimates that sales of Beginner tours would increase by 50%. He believes that he could still eliminate the $80,000 administrative position. Equipment currently used for the Advanced tours would be used by the additional Beginner tours. Should Baldwin drop the Advanced tour? Base your recommendation on both quantitative and qualitative considerations. - Page Break Question 4 Denver Engineering manufactures small engines that it sells to manufacturers who install them in products such as lawn mowers. The company currently manufactures all who wishes to supply the starter assemblies used in these engines. The starter assemblies are currently manufactured in Division 3 of Denver Engineering The costs relating to the starter Variable direct manufacturing labour $300,000 Manufacturing overhead $800,000 Total $1,500,000 Over the past year, Division 3 manufactured 150,000 starter assemblies. The average starter assembly is $10($1,500,000/150,000) Further analysis of manufacturing overhead revealed the following information. Of the total manufacturing overhead, only 25% is considered variable. Of the fixed portion, 300,000 is an allocation of general overhead that will remain unchanged for the $200,000 of the fixed overhead is avoidable if production of the starter assemblies is discontinued. The balance of the current fixed overhead, $100,000, is the divisio manager's salary. If Denver Engineering discontinues production of the starter assemblies, the manager of Division 3 will be transferred to Division 2 at the same salary. This move will allow the company to save the $80. Tutwiler Electronics, a reliable supplier, has offered to supply starter-assembly units at $8 per unit. Because this price is less than the current average cost of $10 per unit, the vice president of manufacturing is eager to accept this offer. Should Denver Engineering accept the outside offer? Base your recommendation on both quantitative and qualitative considerations
