QUESTION 4 Epsilon Co. can produce a unit of product for the following costs Direct material $ 9.00 Direct labor 25,00 Overhead 45 00 Total product costs per unit $ 79 00 An outside supplier offers to provide Epsilon with all the units it needs at $69.50 per unit. If Epsilon buys from the supplier, the company will still incur 30% of its overhead. Epsilon should choose to O Buy since the relevant cost to make it is $65.50 O Buy since the relevant cost to make it is $79.00 Make since the relevant cost to make it is $65.50. O Make since the relevant cost to make it is $47.50. Buy since the relevant cost to make it is $47.50. QUESTION 5 Factor Co. can produce a unit of product for the following costs Direct material $ 8 60 Direct labor 24.60 Overhead 43.00 Total product cost per unit 76.20 An outside supplier offers to provide Factor with all the units it needs at $48. 40 per unit. If Factor buys from the supplier, the company will still incur 60% of its overhead. Factor should choose to: O Buy since the relevant cost to make it is $50.40. Make since the relevant cost to make it is $50.40. Make since the relevant cost to make it is $33.20. Buy since the relevant cost to make it is $33 20 Buy since the relevant cost to make it is $59.00. QUESTION 6 Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $41,200. The division sales for the year were $944,800 and the variable costs were $467,000. The fixed costs of the division were $519,000. 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: $477,800 increase $270,200 decrease $270,200 increase $477,800 decrease $207,600 increase QUESTION 7 J&H Company has a router platform with a book value of $66,000 and a 3-year remaining life. A new router platform is available at a cost of $126,000, and J&H can also receive $16,100 for trading in the old router platform. The new router platform will reduce variable manufacturing costs by $31, 100 per year over its three-year life Should the router platform be replaced? Yes, as it is always important to have current technology. J&H will be not be better or worse off by replacing the router platform. Yes, as the company will increase income by $16,600 total. Yes, as will increase income by $31, 100 in total. No, it will decrease income by $16,600 in total