Thank you so much.
9 Warner Corporation purchased a machine 7 years ago for $399,000 when it launched product P50. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 300 machine costing $389,000 or by a new model 200 machine costing $352,600. Management has decided to buy the model 200 machine. It has less capacity than the model 300 machine, but its capacity is sufficient to continue making product P50. Management also considered, but rejected, the alternative of dropping product P50 and not replacing the old machine. If that were done, the $352,600 invested in the new machine could instead have been invested in a project that would have returned a total of $455,400. Required: 1. What is the total differential cost regarding the decision to buy the model 200 machine rather than the model 300 machine? 2. What is the total sunk cost regarding the decision to buy the model 200 machine rather than the model 300 machine? 3. What is the total opportunity cost regarding the decision to invest in the model 200 machine? 1. Differential cost 2. Sunk cost 3. Opportunity costThe PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its 10 assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that are incurred at the company. Required: For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. 1.The cost of a hard drive installed in a computer. O Direct labor cost O Direct materials cost O Manufacturing overhead cost O Selling cost O Administrative cost2. The cost of advertising in the Puget Sound Computer User newspaper. Cl Direct labor cost Cl Direct materials cost Cl Manufacturing overhead cost C! Selling cost Cl Administrative cost 1T he wages of employees who assemble computers from components. Cl Direct labor cost Cl Direct materials cost C! Manufacturing overhead cost Cl Selling cost C! Administrative cost 4.Sales commissions paid to the company's salespeople. O Direct labor cost O Direct materials cost O Manufacturing overhead cost O Selling cost O Administrative cost 5. The salary of the assembly shop's supervisor. O Direct labor cost O Direct materials cost O Manufacturing overhead cost O Selling cost O Administrative costE.The salaryr of the company's accountant. 0 Direct labor cost 0 Direct materials cost O Manufacturing overhead cost 0 Selling cost 0 Administrative cost ?.Depreciation on equipment used to test assembled computers before release to customers. 0 Direct labor cost {3' Direct materials cost 0 Manufacturing overhead cost 0 Selling cost 0 Administrative cost Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy 11 cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financial statements before approving the loan. Required: Classify each cost listed below as either a product cost or a period cost for the purpose of preparing financial statements for the bank. Costs Product Cost / Period Cost 1. Depreciation on salespersons' cars. 2. Rent on equipment used in the factory. 3. Lubricants used for machine maintenance. 4. Salaries of personnel who work in the finished goods warehouse. Product Cost 5. Soap and paper towels used by factory workers at the end of a shift. Period Cost 6. Factory supervisors' salaries. 7. Heat, water, and power consumed in the factory. 8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.) 9. Advertising costs. 10. Workers' compensation insurance for factory employees. 11. Depreciation on chairs and tables in the factory lunchroom. 12. The wages of the receptionist in the administrative offices.13. Cost of leasing the corporate jet used by the company's executives. 14. The cost of renting rooms at a Florida resort for the annual sales conference. 15. The cost of packaging the company's product