Sunlands Shop can make 1000 units of a necessary component with the following costs:

Direct Materials	$34000
Direct Labor	6000
Variable Overhead	3000
Fixed Overhead	?

The company can purchase the 1000 units externally for $51000. The unavoidable fixed costs are $2000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component?

$8000

$6000

$10000

Cannot be determined

It costs Oriole Company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit. A foreign wholesaler offers to purchase 5600 units at $21 each. Oriole would incur special shipping costs of $2 per unit if the order were accepted. Oriole has sufficient unused capacity to produce the 5600 units. If the special order is accepted, what will be the effect on net income?

$5600 increase

$5600 decrease

$16800 increase

$100800 increase

Coronado Industries has the following costs when producing 100000 units:

Variable costs	$600000
Fixed costs	900000

An outside supplier is interested in producing the item for Coronado. If the item is produced outside, Coronado could use the released production facilities to make another item that would generate $240000 of net income. At what unit price would Coronado accept the outside suppliers offer if Coronado wanted to increase net income by $220000?

$6.20

$5.80

$8.40

$10.60