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Unformatted text preview: Do not discontinue since profits will drop by $8,300 Problem 35 1 Incremental cost to buy $(3,600) Incremental cost savings 3,700 Incremental increase in profit if bought/outsourced $100 Answer D 2 Incremental revenue $1,200 Incremental cost ($1.60*800) (1,280) Incremental decrease in profit if order is accepted $(80) Answer B 3 Incremental revenue per book $5 Incremental cost per book (6) Incremental decrease in profit if color printing used $(1) Answer F 4 $8,000 of Direct fixed costs will be eliminated, but the $12,000 of allocated fixed will so the profit will decline. Answer H ns: 15% 15% ll continue,...
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