The Owens Company budgeted sales of 20,000 printers at $90 per unit last year. Variable manufacturing costs were budgeted at $46 per unit, and fixed manufacturing costs at $12 per unit. A special order for 1,000 printers at $72 each was received by Owens in April. There is enough plant capacity to meet these additional units without incurring any additional fixed manufacturing costs; however, the production would have to be done on an overtime basis at an estimated additional cost of $5 per printer. Acceptance of the special order would not affect Owens' normal sales and no selling expenses would be incurred. What would be the increase to net operating income if the special order were accepted? $21,000 $9000 $14,000 $10,000 none of the above Current Attempt in Progress Sleek Looks has been using the hame machines to make its name brand clothing for the last five years. A cost efficiency consultant has suggested that production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the company $100,000. The old machines presently have a book value of $60,000 and a market value of $6,000. They are expected to have a five-year remaining life and zero salvage value. The new machines would cost the company $50,000 and have operating expenses of $9,000 a year. The new machines are expected to have a five-year useful life and no salvage value. The operating expenses associated with the old machines are $15,000 a year. The new machines are expected to increase quality, justifying a price increase, and thereby increasing sales revenue by $5,000 a year. Which of the following statements is true? The company will be $12,000 better off over the 5 -year period if it replaces the old equipment. The company will be $20,000 better off over the 5 -year period if it keeps the old equipment. The company will be $11,000 better off over the 5 -year period if it replaces the old equipment. The company will be $6,000 better off over the 5 -year period if it replaces the old equipment. Ivanhoe Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $16, direct labour $11, and overhead $16(75% variable). Ivanhoe Co. has sufficient capacity to accept a special order for 38,900 units, but at a discount of 25% from the regular price. Selling costs associated with this order would be $3 per unit. Determine whether Ivanhoe Co. should accept the special order. (Enter loss with a negative sign preceding the number, e.g. 15,000 or parenthesis, e.g. (15,000).) Incremental income (loss) $ Ivanhoe Co. the special order. Wildhorse Co. sells product P-14 at a price of $52 a unit. The per-unit cost data are direct materials $15, direct labour $12, and overhead $12 (75\% variable). Wildhorse has no excess capacity to accept a special order for 39,800 units, at a discount of 25% from the regular price. Selling costs associated with this order would be $4 per unit. Indicate the net income (loss) that Wildhorse would realize by accepting the special order. (Enter loss with a negative sign preceding the number, e.g. 15,000 or parenthesis, e.g. (15,000).) Incremental income (loss) Wildhorse Co. the special order. Current Attempt in Progress Oriole Manufacturing incurs unit costs of $7.40($5.40 variable and $2.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 10,600 of the parts for $5.80 per unit. If it accepts the offer, Oriole will save all variable costs and $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Oriole will realize by buying the part. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, eg. 15,000 or parenthesis, eg. (15,000). Current Attempt in Progress Novak inc makes unfinished bookcases that it sells for $60. Production costs are $78 variable and $10 fseed because it has anused capacity, Novak is considering finishing the bookcases and selling them for $72 Variable frishing costs are expected to be $9 per unit with no increase in fixed costs. Prepare an analysis on a per-unit basis that shows whether Novak should sell untinished or tinished bookicases, If an ansunt raduces Blue Spruce Company has a factory machine with a book value of $165,000 and a remaining useful life of 6 years. A new machine is available at a cost of $245,500. This machine will have a 6 -year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $590,000 to $491,000. Prepare an analysis that shows whether Blue Spruce should retain or replace the old machine. (If an amount reduces the net income then enter with a negative sign preceding the number or parenthesis, eg, 15,000,(15,000). Current Attempt in Progress Wildhorse Inc. manufactures golf clubs in three models. For the year, the Penny Worth line has a net loss of $6.200 from sales of $225,000, variable costs of $202,500, and fixed costs of $28,700. If the Penny Worth line is eliminated, $15,100 of fixed costs will remain. Prepare an analysis showing whether the Penny Worth line should be eliminated. If an amount reduces the net income then enter with a negative sign preceding the number eg. 15,000 or parenthesis, eg, (15,000).)