THE FOLLOWING INFORMATION PPLIES TO QUESTIONS 16 AND 17: The management accountant for Martha's Book Store has prepared the following income statement for the most current year Cookbook Travel Book Classics Total $60,000 $100,000 $40,000 $200,000 Cost of goods sold Contribution margin Order and delivery processing Rent (per sq. foot used) Allocated corporate costs Corporate profit 121,000 65,000 20,000 7000 36,000 24,000 18,000 79,000 21,000 1,000 8,000 3,000 6,000 21,000 $ (3,000) $6,000 $2,000 $5,000 6. If the cookbook product line had been discontinued prior to this year, the company would 7,000 7,000 have reported A) greater corporate profits B) less corporate profits C) the same amount of corporate profits D) resulting profits cannot be determined 17. If the travel book line had been discontinued, corporate profits for the current year would have decreased by: A) $35,000 C. $14,000 B) $13,000 D. $6,000 Consider the following Level of Activity Total Cost Units of Activity Highest Lowest Difference $28,000 15,000 10,000 6,000 5,000 18. Use the high-low method of cost estimation to solve for the fixed and variable cost portions of this cost and select the appropriate answer. A) Fixed cost:$ 6,000; variable cost: $1.20 per unit B) Fixed cost: $22,000; variable cost: $2.20 per unit. Fixed cost: $10,000; variable cost: $1.20 per unit. Fixed cost: $ 4,000; variable cost: $1.20 per unit. Alexis Corp. is considering the replacement of a machine that is presently used in production of its product. The following information is available: (Question 21 &22) $35,000 $45,00o 10 Original Cost Useful Life Current age Book value 25,000 8.000 0 Future Disposal Value Annual operating cost 4.000 7.000