Question 12 Concord Corporation's unit manufacturing cost is: Variable Costs Fixed Costs $50 25 A special order for 2000 units has been received from a foreign company. The unit price requested is $54. The normal unit price is $94. If the order is accepted, unit variable costs will increase by $2 for additional freight costs. If the order is accepted, incremental profit (loss) will be $(42000). $38000. $(46000). $4000. Question 13 Sunland Company incurs the following costs to produce 10600 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $8904 11978 13356 16200 An outside supplier has offered to sell Sunland the subcomponent for $2.85 a unit. If Sunland could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by $(6074). $1028. $(4184). O $7028. Question 14 Coronado Industries produces 5000 units of part A12E. The following costs were incurred for that level of production: Direct materials $ 50000 Direct labor 155000 Variable overhead 70000 Fixed overhead 175000 If Coronado buys the part from an outside supplier, $40000 of the fixed overhead is avoidable. What is the relevant cost per unit of part A12E? $63 $82 o $55 o $90 Question 15 Oriole Company manufactures widgets. Embree Company has approached Oriole with a proposal to sell the company widgets at a price of $130000 for 100000 units. Oriole is currently making these components in its own factory. The following costs are associated with this part of the process when 100000 units are produced: Direct materials Direct labor Manufacturing overhead Total $ 46500 43500 60000 $150,000 The manufacturing overhead consists of $20200 of costs that will be eliminated if the components are no longer produced by Oriole. From Oriole's point of view, how much is the incremental cost or savings if the widgets are bought instead of made? O $20000 incremental savings O $19800 incremental cost O $19800 incremental savings O $20000 incremental cost Question 17 Coronado Industries produces corn chips. The cost of one batch is below: $18 15 Direct materials Direct labor Variable overhead Fixed overhead 14 An outside supplier has offered to produce the corn chips for $32 per batch. How much will Coronado Industries save if it accepts the offer? O $1 per batch $15 per batch $13 per batch O $27 per batch Question 18 Coronado Industries has old inventory on hand that cost $9750. Its scrap value is $13000. The inventory could be sold for $32500 if manufactured further at an additional cost of $9750. What should Coronado do? O Hold the inventory at its $9750 cost Manufacture further and sell it for $32500 O Sell the inventory for $13000 scrap value Dispose of the inventory to avoid any further decline in value Question 19 A company has a process that results in 14000 pounds of Product A that can be sold for $8 per pound. An alternative would be to process Product A further at a cost of $93800 and then sell it for $14 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action? O Sell now, the company will be better off by $93800. O Sell now, the company will be better off by $9800. Process further, the company will be better off by $9800. O Process further, the company will be better off by $84000
