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QUESTION 37 The Canyon Fish Farm raises catfish. During each year the firm spends 56,000 in total to raise 10,000 catfish. At the end of

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QUESTION 37 The Canyon Fish Farm raises catfish. During each year the firm spends 56,000 in total to raise 10,000 catfish. At the end of the year, the catfish can be sold whole for $7.00 each. Alternatively, the firm can spend $0.80 per fish to convert the whole fish into fish fillets. The fillets from one fish sell for $9.40. The Canyon Fish Farm feeds their catfish ground soy meal which they currently make themselves. The cost to produce a pound of soy meals Direct material $0.30 Direct labor Fixed overhead S020 Total $0.90 per pound A local entrepreneur has offered to sell the farm ground soy meal for 5.75 per pound. If the soy meal is purchased all material and labor costs will be eliminated. All fixed overhead costs will continue at the same level whether the meal is purchased or produced internally. What will be the per pound effect on Canyon Fish Farm profit if the meal is purchased from the entrepreneur? $0.20 Increase 50.05 decrease $0.70 decrease $0.15 decrease QUESTION 38 A cost is relevant to a given decision if it is a historical cost that is the same among all alternatives is an expected future cost that is the same among the alternatives. differs between the alternatives. is unavoidable

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