QUESTION 23 Factor Co. can produce a unit of product for the following costs: Direct material Direct labor Overhead Total product cost per unit 40 $ 72 An outside supplier offers to provide Factor with all the units it needs at $46 per unit. If Factor buys from the supplier, the company will still incur 60% of its overhead. Factor should choose to: A. Buy since the relevant cost to make it is S56. B. Make since the relevant cost to make it is $48. C. Buy since the relevant cost to make it is $48. D. Make since the relevant cost to make it is $32. QUESTION 24 Product A requires 5 machine hours per unit to be produced, Product B requires only 3 machine hours per unit, and the company's productive capacity is limited to 240,000 machine hours. Product A sells for $16 per unit and has variable costs of S6 per unit. Product B sells for $12 per unit and has variable costs of 55 per unit. Assuming the company can sell as many units of either product it produces, the company should: A. Produce only Product A. B. Produce only Product B. OC. Produce equal amounts of A and B. D. Produce A and B in the ratio of 62.5% A to 37.5% B. QUESTION 25 Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $42,000. The division sales for the year were $960,000 and the variable costs were $475,000. The fixed costs of the division were $527,000. If the backpack division is dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on Granfield's operating income for eliminating this business segment would be: A. $485,000 decrease B. $210,800 increase C. $274,200 decrease D. 9485,000 increase