Unit product cost

$$21\mathrm{.}40$

Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product $Q41$ that would increase the variable costs by $$7\mathrm{.}00$ per unit and that would require an investment of $$15,000$ in special molds that would have no salvage value.

This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, the company's overall net operating income would increase $($decrease$)$ by:

A$)($$$21,300)$

B$)($$$25,200)$

C$)($$$5,700)$

D$)$ $$10,800$

$12.$ Wenig Inc. has some material that originally cost $$73,500.$ The material has a scrap value of $$45,600$ as is$,$ but if reworked at a cost of $$6,600,$ it could be sold for $$58,100.$ What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as is as scrap?

A$)$ decrease of $$22,000$

B$)$ decrease of $$67,600$

C$)$ increase of $$51,500$

D$)$ increase of $$5,900$

$13.$ Management is considering a one$-$time$-$only special order. There is sufficient idle capacity to fill the order without affecting any normal sales. Which one of the following is NOT relevant in making the decision?

A$)$ incremental costs

B$)$ absorption costing unit product costs

C$)$ variable costs

D$)$ differential costs

$14.$ Fabio Corporation is considering eliminating a department that has a contribution margin of $$30,000$ and $$60,000$ in fixed costs. Of the fixed costs, $$15,000$ cannot be avoided. The effect of eliminating this department on Fabio's overall net operating income would be:

A$)$ a decrease of $$15,000.$

B$)$ an increase of $$30,000.$

C$)$ an increase of $$15,000.$

D$)$ a decrease of $$30,000.$

$15.$ Fost Corporation's contribution margin ratio is $20\%.$ If the degree of operating leverage is $15$ at the $$225,000$ sales level, net operating income at the $$225,000$ sales level must equal:

A$)$ $$6,750$

B$)$ $$3,000$

C$)$ $$2,250$

D$)$ $$5,063$

$16.$ Hartung Corporation produces and sells a single product. Data concerning that product appear below:

$\backslash$table$[[,$Per Unit,Percent of Sales$],[$Selling price,$$140,100\%$