Cengage_Now_Assignment_10_Solutions

# Cengage_Now_Assignment_10_Solutions - Cengage Now...

This preview shows pages 1–2. Sign up to view the full content.

Cengage Now Assignment 10 Solutions 1. (MC 7-3) Answer: C 2. (MC 7-8) Answer: C 3. (MC 7-11) Answer: C Standard Deluxe CM per unit \$ 125 \$200 ÷ tuning hours per unit ÷ 2 ÷ 4 CM per tuning hour \$62.50 \$ 50 4. (MC 7-12) Answer: C 5. (E 7-4) The relevant costs of making the product are the variable costs of \$47 per unit. If Switzer buys the units for \$50, the company can only avoid the \$47 of relevant variable costs. If Switzer accepts the offer and buys the part for \$50, income will decrease by \$3,000 (1,000 units x \$3.00 in additional cost per unit). 6. (E 7-6) If painted rockers are dropped, overall operating profit will not be affected as follows: Decrease in overall CM (\$15,000) Decrease in FC * 15,000 Overall decrease in operating income \$ 0 * A decrease in FC equates to an increase in profit Since the contribution margin lost is exactly equal to the avoidable fixed costs, overall profit will not change.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
7. (E 7-10) Based on the computations below, DePaulis should finish the chairs since the
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 2

Cengage_Now_Assignment_10_Solutions - Cengage Now...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online