3 points each 66 Multiple Choice/ Short Answer (22 questions is trying to decide whether to make or buy a component of the product they sell The manager of Jimco, Inc. is Which of the following costs and benefits is not relevant to the decision? to 1. a. Direct labor cost involved in making the component. b. The purchase price of the component if it is bought c. Variable manufacturing overhead involved in making the component. The selling price of the product. d. The finance dept recommends a lower cost supplier for a common production material component. This would likely have a favorable effect on which of the following variances? 2. Labor Efficiency Variance Materials Price Variance Yes No Yes No Yes Yes No No b. c. d. Gandy Company has 5,000obsolete desk lamps that are carried in inventory at a manufacturing cost of $50,000 If the lamps are reworked for $20,000, they could be sold for $35,000. Alternatively, the lamps could be sold for 8,000 as scrap. In a decision model analyzing these alternatives, the sunk cost would be: 3. a. $8,000 b. $15,000 c. $20,000 d. $50,000 3a. Refer to Gandy Company above. Should the lamps be reworked and sold or just sold as scrap? Show your w to explain