The following costs were incurred in September:

Direct materials	$ 49,000
Direct labor	$ 26,000
Manufacturing overhead	$ 34,200
Selling expenses	$ 33,500
Administrative expenses	$ 45,500

Conversion costs during the month totaled:

$188,200

$83,200

$60,200

$93,700

Nikkel Corporation, a merchandising company, reported the following results for July:

Sales	$ 440,000
Cost of goods sold (all variable)	$ 176,000
Total variable selling expense	$ 18,650
Total fixed selling expense	$ 15,400
Total variable administrative expense	$ 8,360
Total fixed administrative expense	$ 32,560

The gross margin for July is:

$392,040

$236,990

$264,000

$189,030

Anaconda Mining Company shipped 9,000 tons of copper concentrate for $486,000 in March and 11,000 tons for $593,000 in April. Shipping costs for 12,000 tons to be shipped in May would be expected to be:

$ 642,000

$ 593,020

$ 646,500

$ 592,780

Management of Modugno Corporation is considering whether to purchase a new model 370 machine costing $462,000 or a new model 240 machine costing $408,000 to replace a machine that was purchased 7 years ago for $450,000. The old machine was used to make product M25A until it broke down last week. Unfortunately, the old machine cannot be repaired.

Management has decided to buy the new model 240 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product M25A.

Management also considered, but rejected, the alternative of simply dropping product M25A. If that were done, instead of investing $408,000 in the new machine, the money could be invested in a project that would return a total of $451,000.

In making the decision to buy the model 240 machine rather than the model 370 machine, the sunk cost was:

$451,000

$450,000

$408,000

$462,000

Bakker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $111,650 and 3,500 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $113,400 and actual direct labor-hours were 3,400.

The applied manufacturing overhead for the year was closest to:

$110,160

$113,400

$108,460

$111,757