Turner, Inc. budgeted 10,000 widgets for production during 2016. Turner has capacity to produce 15,000 units. The sale price of the widgets is $80 per unit. Fixed factory overhead is allocated using direct labour hours. The following estimated costs were provided:

Direct material $ 80,000

Direct labour 600,000

Variable manufacturing overhead 50,000

Fixed factory overhead costs 20,000

Total $750,000

During the year 8,000 units were produced, and 7,000 units was sold.

When preparing the static budget for the production department, which level of activity should the company use?

A. 7,000 units B. 8,000 units C. 10,000 units D. 15,000 units

Hardy Co's unit production cost under variable costing is $21, and $28 under absorption costing. Net income under variable costing was $245,000 and $187,600 under absorption costing last year. Production equalled 67,000 units. How many units did Hardy sell?

A. 75,200 B. 58,800 C. 74,000 D. 60,000

Turner received an order for 3,000 units from a new customer in a country in which Turner has never done business. This customer has offered $73.50 per widget. Should Turner accept the order?

A. Yes, because the price of $73.50 is greater than the cost of $73 under variable costing

B. Yes, because the price of $73.50 is greater than the cost of $50 under absorption costing

C. No, because the price of $73.50 is lower than the cost of $75 under absorption costing

D. No, because the price is $73.50 is lower than the sale price of $80.