The following are the unit costs of making and selling an item at a volume of 30,000 units per month, which represents the company's capacity:

Manufacturing:
Direct materials	$	6.30
Direct labor		12.30
Variable overhead		2.30
Fixed overhead		4.30
Selling and administrative:
Variable		8.30
Fixed		10.30

Assume the company has 300 units left over from last year which have small defects and which will have to be sold at a reduced price as scrap. This would have no effect on the company's other sales. The variable selling and administrative costs would have to be incurred to sell the defective units. The cost that is relevant as a guide for setting a minimum price on these defective units is: (Round your answer to two decimal places.)

$8.30 per unit.

$18.60 per unit.

Ferguson Company manufactures 3,300 parts per year; the parts are used in the assembly of one of the companys products. The unit product cost of these parts is:

Variable manufacturing cost	$	31.30
Fixed manufacturing cost		15.90
Unit product cost	$	47.20

The part can be purchased from an outside supplier at $39.30 per unit. If the part is purchased from the outside supplier, two-thirds of the fixed manufacturing costs can be eliminated. The annual impact on the companys net operating income as a result of buying the part from the outside supplier would be:

$8,910 increase.

$8,580 increase.

Marion Company sells its product for $133 per unit. The companys unit product cost based on the full capacity of 370,000 units is as follows:

Direct materials	$	24.70
Direct labor		30.70
Manufacturing overhead		38.10
Unit product cost	$	93.50

A special order offering to buy 127,000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be $18.70 per unit for shipping. The company has sufficient idle capacity to manufacture the additional units. Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. In negotiating a price for the special order, the minimum acceptable selling price per unit should be: (Round your answer to two decimal places.)

$93.50.

$86.80.

Sentinel Inc. manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $50,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: Product X, $25,000; Product Y, $45,000; and Product Z, $30,000. Each product may be sold at the split-off point or processed further. The additional processing costs and the sales value after further processing for each product (on an annual basis) are as follows:

	Product X		Product Y		Product Z
Additional processing costs	$	10,000	$	32,000	$	6,000
Sales value (after further processing)		40,000		75,000		37,000

Which of the product/s should the company be processing further?

Product X and Y

Product X and Z