The Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total cost of $576,000. If these calculators are upgraded at a total cost of $150,000, they can be sold for a total of $210,000. As an alternative, the calculators can be sold in their present condition for $40,000.

Assume that Tolar decides to upgrade the calculators. At what selling price per unit would the company be as well off as if it just sold the calculators in their present condition?

Multiple Choice

• $75 per calculator

• $475 per calculator

• $308 per calculator

• $160 per calculator

The SP Corporation makes 41,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $ 10.00 $ 9.00 $ 3.70 $ 4.65 An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $25.45. If SP Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice O $190,650 O O $264,450 ($77,900) O 112,750 O