## (Solved) Question 3.3. Banet Company is considering the following alternatives: Alternative A Alternative B..

Question 3.3. Banet Company is considering the following alternatives: Alternative A Alternative B Revenues \$60,000 \$72,000 Variable costs 40,000 40,000 Fixed costs 12,000 18,000 What is the incremental profit? (Points : 1) \$10,000 \$0 \$6,000 \$4,000 Question 4.4. Reeling company is considering the following alternatives: Alternative 1 Alternative 2 Revenues \$130,000 \$130,000 Variable costs 65,000 75,000 Fixed costs 34,000 36,000 Which of the following are relevant in choosing between the alternatives? (Points : 1) Variable costs and fixed costs Revenues only Fixed costs only Variable costs only Question 5.5. It costs Garner Company \$12 of variable and \$5 of fixed Document Preview: Question 3.3. Banet Company is considering the following alternatives: Alternative A Alternative B Revenues \$60,000 \$72,000 Variable costs 40,000 40,000 Fixed costs 12,000 18,000 What is the incremental profit? (Points : 1) \$10,000 \$0 \$6,000 \$4,000 Question 4.4. Reeling company is considering the following alternatives: Alternative 1 Alternative 2 Revenues \$130,000 \$130,000 Variable costs 65,000 75,000 Fixed costs 34,000 36,000 Which of the following are relevant in choosing between the alternatives? (Points : 1) Variable costs and fixed costs Revenues only Fixed costs only Variable costs only Question 5.5. It costs Garner Company \$12 of variable and \$5 of fixed costs to produce one bathroom scale which normally sells for \$35. A foreign wholesaler offers to purchase 3,000 scales at \$15 each. Garner would incur special shipping costs of \$1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 3,000 scales. If the special order is accepted, what will be the effect on net income? (Points : 1) \$6,000 increase \$6,000 decrease \$9,000 decrease \$45,000 increase Question 6.6. In incremental analysis, fixed costs are ordinarily considered irrelevant costs in a make-or-buy decision. Which of the following is also true? (Points : 1) costs are not relevant if they change between alternatives all costs are relevant if they change between alternatives only fixed costs are relevant only variable costs are relevant Question 7.7. Tunnel, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows: Direct materials and direct labor \$11 Variable overhead 5 Fixed overhead 8 Total \$24 Juran Company has contacted Tunnel with an offer to sell it 5,000 of the wickets for \$18 each. If Tunnel makes the wickets, variable costs are \$16 per unit. Fixed costs are \$8 per unit; however, \$5 per unit is unavoidable. Should Tunnel make or buy the wickets? (Points : 1) Buy; savings = \$15,000 Buy; savings = \$5,000 Make; savings =...

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