Use the decision table to answer each question below

	Alternative 1(Make)	Alternative 2(Buy)	Difference	alternative 1 is (higher/lower?)
Total Production costs

14. You be the judge! Should we make product X that costs $27.50 a unit with an output of 1000 units or buy it from outside (outsource) at $25 a unit and get a rent of $2,000 a period for the freed space? The indirect overhead allocated to product X amounts to $3,600 a period a. You save $900 if you outsource b. You lose $900 if you outsource You save $4,100 if you outsource. d. You lose $4,100 if you outsource None of the above C. e. 15. You decide! In this general store, we have two departments cosmetics and other goods. Cosmetics had a profit of $87,500, Other had a loss of $24,800. Forty percent of the rent of $120,000 is charged to Other. If we close Other, we can sublet the space and receive an income of $18,000 for it. Losses will decrease by 5,200 if we close Other. b. Losses will increase by 5,200 if we close Other. a. Losses will remain the same if we close Other. C. None of the above d. Saba Printing is considering accepting an order for $24,900 even though its cost amounts to $28,500 inclusive of $12,500 worth of overhead -60% of this overhead is avoidable if the order is not accepted. The order must be accepted because it increases profit by $1,400 rejected because it decreases profit by $1,400 accepted because it increases profit by $3,900. d. a. b. C. rejected because it decreases profit by $3,900. None of the above. e. 17. Arman Toys is considering selling 500 units of its AA Toy, which has a total cost of $25 a unit (60% of which is variable cost), for only $19 a unit to a customer who does business in Mexico. The current selling price of the AA Toy is $29 a unit and the company has no excess capacity. Arman should sell the toys because it will increase its profit by $2,000 not sell the toys because it will decrease its profit by $2,000 sell the toys because it will increase its profit by $5,000 not sell the toys because it will decrease its profit by $5,000 None of the above a. b. c. d. e