Questions The Springfield Corporation produces an executive jet for which is currently manufactures a fuelvalve the cost of the valve is indicated below: Cost per Unit Variable costs Direct material $907 Direct labor 638 Variable overhead 279 Total variable costs $1.824 Fixed costs Depreciation of equipment 510 Depreciation of building Supervisory series 287 Total fixed costs 982 Total cost 12,806 The company has an offer from Duvall Valves to produce the part for $2,001 per un and supply 960 valves (the number needed in the coming year). If the company accepts this offer and shuts down production of valves, production workers and supervisors will be reassigned to other areas where, unfortunately, they really are not needed. The equipment cannot be used elsewhere in the company, and it has no market value. However, the Face occupied by the production of the valve can be used by another production group that is currently leasing space for $59.910 per year. Identity the following statements as true or false a. Supervisory salary is an avoidable cost the company decides to buy the valves. b. Depreciation of building is an avoidable cost if the company decides to buy the valves The False c. The $59,910 cost of leasing space is an opportunity cost associated with continuing production of the valve d. The depreciation of equipment is an opportunity cost associated with continuing production of the valve. e. Depreciation of building is a un cost even the company continues with production of the valve. F. Supervisory salary is a un cost even if the company continues with production of the valve BACK Question 5 The Springfield Corporation produces an executive jet for which it currently manufactures a fuel valve; the cost of the valve is indicated below: Cost per Unit Variable costs Direct material $907 Direct labor 638 Variable overhead 279 Total variable costs $1,824 Fixed costs Depreciation of equipment 510 Depreciation of building 185 Supervisory salaries 287 Total fixed costs Total cost $2,805 The company has an offer from Duvall Valves to produce the part for $2,001 per unit and supply 960 valves (the number needed in the coming year), of the company accepts this offer and shuts down production of valves, production workers and supervisors will be reassigned to other areas where, unfortunately, they really are not needed. The equipment cannot be used elsewhere in the company, and has no market value. However, the space occupied by the production of the valve can be used by another production group that is currently leasing space for $59.910 per year. Identify the following statements as true or false True False V # Supervisory salary is an avoidable cost the company decides to buy the valves. b. Depreciation of building is an avoidable cost the company decides to buy the valves. The $59,910 cost of leasing space is an opportunity cost associated with continuing production of the valve. d. The depreciation of equipment is an opportunity cost associated with continuing production of the valve e. Depreciation of building is a sunk cost even if the company continues with production of the valve. 1. Supervisory salary is a un cost even if the company continues with production of the valve