Using the following information, answer the next 3 questions

Question 26 (2 points) In order to analyze total costs as a function of machine hours, Rupper Company developed a simple regression model. The model was based on 60 monthly observations of costs and machine hours and had a r squared of .90. The model was: Costs = 14.3 A + $161,330 where A is machine hours If Rupper's machine hours cost for next month is projected to be 16,000 they should expect total costs to be closest to: $351,117 $228,800 $161,330 $390,130 Question 27 (2 points) When applying the concept of present value to capital budgeting decisions, which of the following statements is TRUE? Internal rate of return cannot be computed when cash flows are unequal year to year Residual value is not included in the calculation of Net Present Value. )A project with a higher IRR will be preferable over one with a lower IRR. A positive NPV means that a project earns less than the cost of capital on a project.Question 28 (2 points) Which of the following would be the least likely to be considered as part of manufacturing overhead? Advertising Wages of custodial staff who clean the production area after hours Utilities used on the production floor Depreciation on equipment used in the factory Question 29 (2 points) Which of the following is correct with regard to using Net Present Value (NPV) in capital budgeting? When the NPV is greater than zero, the project should be approved Only when NPV is equal to zero should the project be completed. When the NPV is less than zero, the project should receive the go ahead A project with a higher NPV should be completed instead of project with a lower NPV.Question 30 (2 points) A clothing manufacturer makes both shirts and shorts. The sales price for shirts is $24 with variable costs of $10 and shorts have a price of $32 and variable costs of $17. Which of the following is a true statement for this clothing manufacturer in the short term? They would prefer to make shorts instead of shirts They would prefer to make shirts instead of shorts They would not have a preference for either product. O If both products used the same machine for different lengths of time, it would make no difference. The following information is given for XYZ, Corp and will be used to answer the next 7 questions Sales price per unit $8.50 Direct labor per unit $1.90 Direct materials per unit $2.60 Variable overhead per unit $1.40 Factory overhead that does not change with volume $327,600 $194, 000 General and administrative expensesQuestion 31 (2 points) What is the breakeven point in units (rounded to the nearest unit)? Question 32 (2 points) Using the original variable and fixed costs, the graph of XYZ's total costs would show which of the following? Slope of the line is $5.90 per unit. The line crosses the Y axis at $590 A vertical line at the start and end of the relevant range A horizontal line for all levels of production Question 33 (2 points) A proposal that would cause XYZ to become more leveraged would most likely entail which of the following? An increase in variable overhead per unit A decrease in the contribution margin per unit )A second product being introduced to the manufacturing process An increase in fixed overheadQuestion 34 (2 points) What is the contribution margin per unit? Question 35 (2 points) Using the original contribution margin, a reduction in sales of 1000 units below break even point will result in a net profit before taxes of: Exactly zero Negative $3,100 Negative $1,400 Negative $2,600 Question 36 (2 points) If a proposal will increase the fixed costs by 10% and lower the direct materials per unit by $.50 what would be the new breakeven point in units (rounded)?What will be the profit before taxes if sales are 240,000 units (rounded) ? Make or Buy Use the following information to answer the next 3 questions: Wheels, Inc., currently manufactures its own custom rims for automobiles. Management is interested in outsourcing production of these rims to a reputable manufacturing company that can supply the rims for $75 per unit. Wheels, Inc., incurs the following annual production costs to produce 10,000 rims internally. Variable Production Costs Per unit For 10,000 Units Direct materials 22 $ 220,000 Direct labor 9 5 90,000 Manufacturing overhead 28 S 280,000 Fixed production costs Factory building and equip lease 70,000 Factory insurance 50,000 Production supervisor's salary 100,000 If production is outsourced the factory building and equipment lease costs will be cut in half . The production supervisor's salary cost will remain regardless of the decision to outsource or to produce internally because the supervisor recently signed a long- term contract with Wheels, Inc.Question 38 (2 points) What would be the best choice for Phillips in the short run? Reduce the salary of the production supervisor Outsource the rims to an outside supplier Open a new factory in another country Continue to make the rims internally Question 39 (2 points) How much will profits improve by making the correct choice between the outsourcing and producing internally? Question 40 (2 points) Phillips may determine the best course is to make the rims internally even if an outside supplier saves them money. Why might this be the case? Shipping delays from outside suppliers are too frequent. Quality control is an issue when rims are not manufactured internally The trained workforce keeps their skills that can be used for other manufacturing. All of the above could be reasons to manufacture internally even if more costly