question 6 & 10

6. When companies are considering outsourcing a function that they currently handle internally (for example manufacturing, warehousing, or payroll), they are often changing the cost for that function from a cost that is mostly variable into a cost that is mostly fixed. 7. In a decision to retain or replace old equipment, the salvage value of the old equipment is relevant in incremental analysis. 8. If Buttercup, Inc, sells two products with a sales mix of 75%/25%, and the respective contribution margins are $80 and $240, then weighted-average unit contribution margin is $120. 9. A company should never accept an order for its product at less than its regular sales price. 10. The elimination of an unprofitable product line may adversely affect the remaining product lines