Ruth Company produces 1,000 units of a necessary component with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $34,000 15,000 9,000 10,000 Ruth Company could avoid $6,000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum extenal price that Ruth Company would accept to acquire the 1,000 units externally? A) $59.000 B) $64,000 C) $58,000 D) $62,000 Which of the following will always be a relevant cost? A) Sunk cost B) Opportunity cost C) Variable cost D) Fixed cost 7. Use the following to answer questions 8-10 Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment S225,000 90,000 300,000 $375,000 Purchase price Accumulated depreciation Annual operating costs If the old equipment is replaced now, it can be sold for 560,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. 240,000 8. Which of the folowing amounts is irrelevant to the replacement decision? A) $60,000 B) $135,000 C) S315,000 D) $375,000 9. The net advantage (disadvantage) of replacing the old equipment with the new equipment is A) S(75,000) B) S(15,000) C) $60,000 D) $90,000