(TCO H) Tilland Corporation is considering dropping product P33U. Data from the company's accounting system appear below.

Sales	$390,000
Variable Expenses	$172,000
Fixed Manufacturing Expenses	$218,000
Fixed Selling and Administrative Expenses	$94,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $35,000 of the fixed manufacturing expenses and $20,000 of the fixed selling and administrative expenses are avoidable if product P33U is discontinued.

Required:

i. According to the company's accounting system, what is the net operating income earned by product P33U? Show your work!

ii. What would be the effect on the company's overall net operating income of dropping product P33U? Should the product be dropped? Show your work! (Points : 15)

Could you also let me know if these answers are correct on multiple choice:

1. (TCO E) Setting up equipment is a (n)(Points : 5) unit-level activity. product-level activity. batch-level activity. organization-sustaining activity.

Question 2. 2. (TCO G) Given the following data, what would ROI be?

Sales	$60,000
Net operating income	$12,000
Contribution margin	$20,000
Average operating assets	$50,000
Stockholder's equity	$15,000

(Points : 5)

10.0% 20.0% 16.5% 24.0%

Question 3. 3. (TCO H) For which of the following decisions are opportunity costs relevant?(Points : 5)

The decision to make or buy a new part. The decision to accept or reject a special order price. The decision to keep or drop a product line. Opportunity costs are relevant for each of the decisions above.

1. (TCO E) Setting up equipment is a (n)(Points : 5) unit-level activity. product-level activity. batch-level activity. organization-sustaining activity.

Question 2. 2. (TCO G) Given the following data, what would ROI be?

Sales	$60,000
Net operating income	$12,000
Contribution margin	$20,000
Average operating assets	$50,000
Stockholder's equity	$15,000

(Points : 5)

10.0% 20.0% 16.5% 24.0%

Question 3. 3. (TCO H) For which of the following decisions are opportunity costs relevant?(Points : 5)

The decision to make or buy a new part. The decision to accept or reject a special order price. The decision to keep or drop a product line. Opportunity costs are relevant for each of the decisions above.