Warner Corporation purchased a machine 7 years ago for $375,000 when it launched product P50. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 300 machine costing $364,900 or by a new model 200 machine costing $334,200. Management has decided to buy the model 200 machine. It has less capacity than the model 300 machine, but its capacity is sufficient to continue making product P50. Management also considered, but rejected, the alternative of dropping product P50 and not replacing the old machine. If that were done, the $334.200 invested in the new machine could instead have been invested in a project that would have returned a total of $469,400 Required 1. What is the total differential cost regarding the decision to buy the model 200 machine rather than the model 300 machine 2. What is the total sunk cost regarding the decision to buy the model 200 machine rather than the model 300 machine? 3. What is the total opportunity cost regarding the decision to invest in the model 200 machine? 1 Differential cost 2. Sunk cost 3. Opportunity cost The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 6,620 batteries at a cost of $110 per battery. It withdrew 6,100 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars being used by the company's traveling sales staff. The remaining 6,000 batteries withdrawn from the storeroom were placed in cars being produced by the company. Of the cars in production during April, 90 percent were completed and transferred from work in process to finished goods. Of the cars completed during the month, 30 percent were unsold at April 30th. Required: 1. Determine the cost of batteries that would appear in each of the following accounts on April 30th. Name of the Cost 1a. Raw Materials 1b. Work in Process c. Finished Goods d Cost of Goods Sold 1e. Selling Expense