Question 35 (4 points) Solo Corporation recently purchased 25,000 gallons of direct material at $5.60 per gallon. Usage by the end of the period amounted to 23,000 gallons. If the standard cost is $6.00 per gallon and the company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as: $800F $9.200F $9.200U. $10,000F. $10,000U. Question 34 (4 points) In a sell or process further decision, which of the following costs is relevant? 1. A variable production cost incurred after split-off. II. A fixed production cost incurred prior to split-off. Only ! Only 11 Both I and II Neither I nor 11 Question 31 (4 points) Hermenegildo Corporation is presently making part P42 that is used in one of its products. A total of 10,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Direct materials Direct labor.... Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Per Unit $4.20 $4.40 $7.70 $6.70 $3.10 $3.30 An outside supplier has offered to produce and sell the part to the company for $23.90 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided. An outside supplier has offered to produce and sell the part to the company for $23.90 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided. If management decides to buy part P42 from the outside supplier rather than to continue making the part, what would be the annual impact on the company's overall net operating income? Net operating income would decline by $5,000 per year. Net operating income would decline by $59,000 per year. Net operating income would decline by $51,000 per year. Net operating income would decline by $55,000 per year