Tanner Company currently pays $14 per unit to buy a part for a product it manufactures. Instead, Tanner could make the part for per unit costs of $6 for direct materials, $4 for direct labor, and $2 for incremental overhead. Tanner normally applies overhead costs using a predetermined rate of 200% of direct labor cost. Should Tanner make or buy the part? Multiple Choice Make the part as the cost to make it is $4 less than the cost to buy it. Buy the part as the cost to buy it is $2 less than the cost to make it. Buy the part as the cost to buy it is $8 less than the cost to make it. Make the part as the cost to make it is $2 less than the cost to buy it. Buy the part as the cost to buy it is $4 less than the cost to make it. A company has already incurred a $55,000 cost in partially producing its three products. Their selling prices when partially and fully processed are shown in the following table with the additional costs necessary to finish their processing. Based on this information, should any products be processed further? Product A Unfinished Selling Price Finished Further Selling Price Processing Costs $ 72 $ 108 $ 35 B 83 124 42 C 94 141 45 Multiple Choice Products A and B should be processed further. None of these products should be processed further. Products B and C should be processed further. Products A and C should be processed further. All of these products should be processed further. Janko Wellspring Incorporated has a pump with a book value of $36,000 and a four-year remaining life. A new, more efficient pump is available at a cost of $57,000. Janko can receive $9,200 for trading in the old pump. The old machine has variable manufacturing costs of $37,000 per year. The new pump will reduce variable costs by $13,200 per year over its four-year life. Should the pump be replaced? Multiple Choice Yes, because Income will increase by $5,000 in total. No, because the company will be $5,000 worse off in total. Yes, because Income will increase by $5,000 per year. No, because Income will decrease by $13,200 per year. No, Janko will record a loss of $18,400 if they replace the pump. Sooky has a spotter truck with a book value of $42,000 and a remaining useful life of five years. At the end of the five years the spotter truck will have a zero-salvage value. iSooky can purchase a new spotter truck for $122,000 and receive $31,200 in return for trading in its old spotter truck. The old spotter truck has variable manufacturing costs of $77,000 per year. The new spotter truck will reduce variable manufacturing costs by $25,200 per year over the five-year life of the new spotter truck. The total increase or decrease in income by replacing the current spotter truck with the new truck is: Multiple Choice $31,200 Increase $35,200 Increase $31,200 decrease $122,000 decrease $35,200 decrease JK Company produces two products, Plush and Supreme. JK Company can sell all of the units it can produce for both products, but it has limited production capacity. Machine hours per unit are .25 hours for Plush and .50 hours for Supreme, and the company has 3,200 machine hours available. Contribution margin per unit is $226 for Plush and $312 for Supreme. What is the total contribution margin if JK chooses the most profitable sales mix? Multiple Choice $3,993,600. $2,892,800. $2,278,400. $2,636,800. $1,318,400.