Question 193 pts

The Rosey Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Rosey Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.

Cost	Hours
$24,360	5,800
$26,400	6,150
$35,000	7,650
$42,360	13,000
$38,100	9,750

What is the cost function?

Group of answer choices

y = $42,360 + $4.20X

y = $24,360 + $3.26X

y = $35,000 + $4.20X

y = $9,860 + $2.50X

________________________________________________

Flag question: Question 20

Question 203 pts

Razor Inc. manufactures industrial components. One of its products used as a subcomponent in auto manufacturing is Fluoro2211. The selling price and cost per unit data for 9,000 units of Fluoro2211 are as follows.

	Per Unit Data
Selling Price		$	150
Direct Materials			20
Direct Labor			15
Variable Manufacturing Overhead			12
Fixed Manufacturing Overhead			30
Variable Selling			3
Fixed Selling and Administrative			10
Total Costs			90
Operating Margin		$	60

During the next year, sales of Fluoro2211 are expected to be 10,000 units. All costs will remain the same except for fixed manufacturing overhead, which will increase by 20%, and direct materials, which will increase by 10%. The selling price per unit for next year will be $160. Based on these data, Razor Inc.'s total contribution margin for next year will be:

Group of answer choices

$882,000

$980,000

$972,000

$1,080,000

__________________________________________

Flag question: Question 21

Question 213 pts

Lake Sales had $2,200,000 in sales last month. The contribution margin ratio was 30% and operating profits were $180,000. What is Lake's margin of safety in sales dollars?

Group of answer choices

$480,000

$2,020,000

$600,000

Cannot be determined with the information given.

______________________________________________________

Flag question: Question 22

Question 223 pts

Ortega Industries manufactures 15,000 components per year. The manufacturing cost of the components was determined to be as follows:

Direct materials	$	150,000
Direct labor		240,000
Variable manufacturing overhead		90,000
Fixed manufacturing overhead		120,000
Total	$	600,000

Assume Ortega Industries could avoid $40,000 of fixed manufacturing overhead if it purchases the component from an outside supplier. An outside supplier has offered to sell the component for $34. If Ortega purchases the component from the supplier instead of manufacturing it, the effect on income would be a:

Group of answer choices

$60,000 increase.

$10,000 increase.

$100,000 decrease.

$140,000 increase