Question: Answer all these questions with the right answer letter next to each question number 32-Cotton Corp. currently makes 9,800 subcomponents a year in one of
Answer all these questions with the right answer letter next to each question number
32-Cotton Corp. currently makes 9,800 subcomponents a year in one of its factories. The unit costs to produce are:
| Per unit | |||
| Direct materials | $ | 29.00 | |
| Direct labor | 25.00 | ||
| Variable manufacturing overhead | 18.00 | ||
| Fixed manufacturing overhead | 10.00 | ||
| Total unit cost | $ | 82.00 | |
An outside supplier has offered to provide Cotton Corp. with the 9,800 subcomponents at an $83.00 per unit price. Fixed overhead is not avoidable. If Cotton Corp. accepts the outside offer, what will be the effect on short-term profits?
Multiple Choice
A_$98,000 increase
B_$107,800 decrease
C_no change
D_$70,560 increase
46-Harbor Images has collected the following cost data for various levels of activity:
| Month | Images Created | Total Cost | |
| August | 5,900 | $ | 5,680 |
| September | 7,650 | $ | 6,300 |
| October | 8,000 | $ | 9,026 |
| November | 4,400 | $ | 5,210 |
a. Using the high-low method, determine the variable cost per image created and the total fixed cost. (Round your variable cost to 2 decimal places.)
b. Estimate the total costs when 6,400 images are created. (Do not round your intermediate calculations.)
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