Question

32.Abbott Company is considering purchasing a new machine to replace a machine purchased one year ago that is not achieving the expected results. The following information is available: Expected maintenance costs of new machine $12,000 per year Purchase price of existing machine $150,000 Expected cost savings of new machine $20,000 per year Expected maintenance costs of existing machine $8,000 per year Resale value of existing machine $35,000 Which of these items is irrelevant? a. Expected resale value of existing machine b. Expected maintenance costs of new machine c. Expected maintenance costs of existing machine d. Purchase cost of existing machine 33.____ is present whenever products have different consumption ratios for different overhead activities. a. Control costs b. Activity inputs c. Activity sharing d. Product diversity e. Environmental costs

34.Workshape Company sells office chairs at $400 per unit, incurs variable cost per unit of $150, and has a total fixed expense of $40,000. How many units must be sold to achieve a target operating income of $60,000? a. 400 units b. 180 units c. 450 units d. 275 units e. 200 units

35

The _____ can be measured for a given level of sales by taking the ratio of contribution margin to operating income.

a.percentage change in profits

b.degree of operating leverage

c.unit contribution margin

d.indifference point

e.margin of safety

Answer 1

The answer has been presented in the supporting sheets. All the parts has been solved with detailed explanation. For detailed answers refer to the supporting sheets .

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