Waterway Industries is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $24 and Waterway would sell it for $53. The cost to assemble the product is estimated at $16 per unit and the company believes the market would support a price of $67 on the assembled unit. What decision should Waterway make?

Sell before assembly, the company will be better off by $2 per unit.

Process further, the company will be better off by $13 per unit.

Sell before assembly, the company will be better off by $14 per unit.

Process further, the company will be better off by $22 per unit.

Bonita Industries is considering the replacement of a piece of equipment with a newer model. The following data has been collected:

	Old Equipment	New Equipment
Purchase price	$162000	$272000
Accumulated depreciation	64800	- 0 -
Annual operating costs	216000	189000

If the old equipment is replaced now, it can be sold for $80000. Both the old equipment’s remaining useful life and the new equipment’s useful life is 5 years. The company uses straight-line depreciation with a zero salvage value for all of its assets.

The net advantage (disadvantage) of replacing the old equipment with the new equipment is

$(57000)

$(110000)

$272000

$54000

Santana Company produces tanning lotion. The following information is provided concerning its standard cost system for the year. Standard data is as follows: budgeted production, 4,500 units? budgeted fixed overhead, $6.30 per labor hour? budgeted variable overhead, $4.50 per labor hour? labor, 24 minutes @ $12 per hour. Actual data is as follows: actual production, 4,400 units? labor worked, 1,600 hours totaling $24,000? actual overhead, $19,600. How much is the overhead controllable variance?

$160 U

$592 U

$340 U

$2,320 U

none of the above

Answer rating: 100% (QA)

Solution 1 Selling price after assembling 67 per unit Selling price before assembling 53 per uni... View the full answer