The old machine was used to make product CAP until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 280 machine. It has less capacity than the new model 320 machine, but its capacity is sufficient to continue making product CAP. Management also considered, but rejected, the alternative of simply dropping product CAP. If that were done, instead of investing $318,000 in the new machine, the money could be invested in a project that would return a total Of $405,000. 19.
In making the decision to buy the model 280 machine rather than the model 320 machine, the sunk cost was: A. $376,000 c. $405,000 D. $389,000 20. In making the decision to buy the model 280 machine rather than the model 320 machine, the differential cost was: A. $58,000 B. $1 3,000 c. $29,000 D. $71 ,OHO 21 . In making the decision to invest in the model 280 machine, the opportunity cost was: A. 376,000 B. $389,000 Callahan Corporation is a wholesaler that sells a single product. Management has provided the following cost data for TV levels of monthly sales volume.
The company sells the product for $1 15. 80 per unit. 22. The best estimate of the total monthly fixed cost is: A. $24,000 B. $478,050 c. $427,600 D. $528,500 23. Farm Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total cost to manufacture 2,300 units is closest to: A. $446,660 B. $465,840 c. $462,415 D. $478, 170 Questions 24-25 are based on the following information Boeing Enterprises, Inc. , produces and sells a single product whose selling price is $130. 0 per unit and whose variable expense is $39. 00 per unit. The company’s monthly fixed expense is $509,600. 24. Assume the company’s monthly target profit is $1 1,000. The unit sales to attain that target profit is closest to: A. 7,692 B. 13,349 c. 4,005 D. 5,721 25. Assume the company’s monthly target profit is $22,000. The dollar sales to attain that target profit is closest to: A. $1 B. $759,429 D. $531,600 Gallagher Company, which has only one product, has provided the following ATA concerning its most recent month of operations: 26.