Question 21 Waterway Music produces 60100 blank CDs on which to record music. The CDs have the following costs: Direct Materials $10200 14900 Direct Labour Variable Overhead 3200 Fixed Overhead 6700 Waterway could avoid $3700 in fixed overhead costs if it acquires the CDs externally. If cost minimization is the major consideration and the company would prefer to buy the 60100 units externally, what is the maximum external price that Waterway would expect to pay for the units? $31300 $28300 $35000 $32000 Question 22 Hen Company has developed a new product, egg crates that prevent breakage. The cost per crate is $40 and the company expects to sell 1000 crates per year. Hen Company has invested $1520000 in equipment to produce the crates and desires a 10% return on investment. What is Hen Company's desired markup percentage? 10% 38% 100% 380% Question 23 Bonita Company has contacted Carla Vista Inc. with an offer to sell it 5900 of the wickets for $19.00 each. If Carla Vista makes the wickets, variable costs are $12 per unit. Fixed costs are $11 per unit however $5 per unit is avoidable. Should Carla Vista make or buy the wickets? What are the savings of this choice? Buy; savings $29500 Buy; savings = $11800 Make; savings = $23600 Make; savings $11800 Question 24 Coronado, Inc. has 9600 obsolete calculators, which are carried in inventory at a cost of $20100. If the calculators are scrapped, they can be sold for $1.30 each (for parts). If they are repackaged, at a cost of $14300, they could be sold to toy stores for $2.50 per unit. What alternative should be chosen, and why? Scrap; profit is $2780 greater. Repackage; revenue is $5800 greater than cost. Scrap; incremental loss is $7620. Repackage; receive profit of $9700