Question 242.5 pts

Walmart Co. has in-store space that it continuously utilizes to make and sell carmeled popcorn. The only other possible use of that space would be to rent it to a discount optometrist, $1.99 Optical. From Walmart Co.s perspective, the foregone rent revenue represents

Group of answer choices

a sunk cost for Walmart Co.

a differential cost for Walmart Co.

an opportunity cost for Walmart Co.

a discretionary cost for Walmart Co.

All of the above

Flag question: Question 25Question 252.5 pts

Squeeze Fresh Co. can further process a gallon of Lemonade to produce a gallon of Melonade. Lemonade is currently selling for $65 per gallon and costs $42 per gallon to produce. Melonade would sell for $87 per gallon and would require an additional cost of $13 per gallon to produce. What is the differential revenue of producing and selling Melonade?

Group of answer choices

$22 per gallon

$29 per gallon

$32 per gallon

$55 per gallon

None of the above

Flag question: Question 26Question 262.5 pts

Parkay Co. can further process Butter to produce Cream. Butter is currently selling for $30 per pound and costs $28 per pound to produce. Cream would sell for $60 per pound and would require an additional cost of $24 per pound to produce. What is the differential cost of producing Cream?

Group of answer choices

$4 per pound

$24 per pound

$28 per pound

$34 per pound

None of the above

Flag question: Question 27Question 272.5 pts

Valero Co. can further process Kerosene to produce Gasoline. Kerosene is currently selling for $60 per pound and costs $42 per pound to produce. Gasoline would sell for $82 per pound but would require an additional cost of $13 per pound to produce. The differential income of producing Gasoline is

Group of answer choices

$27 per pound

$22 per pound

$18 per pound

$9 per pound

None of the above

Flag question: Question 28Question 282.5 pts

A manufacturer (seller) received an offer from an exporter (buyer) for 10,000 units of product at the reduced purchase price of $16 per unit. (Firms normal domestic selling price is $20.) Acceptance of the offer will not affect normal production or domestic sales prices. The sellers data is available:

Exporter's offer price ............................... $16

Unit manufacturing costs:

Variable ......................................... $13

Fixed .............................................. $ 1

What is the total amount of sellers profit from acceptance of the offer?

Group of answer choices

$16,000 profit

$20,000 profit

$30,000 profit

$60,000 profit

None of the above

Flag question: Question 29Question 292.5 pts

The condensed income statement for a business for the past year is as follows:

Product T Product U

Sales .................................................. $600,000 $320,000

Less: Variable Costs ......................... <540,000> <220,000>

Contribution Margin ....................... $ 60,000 $100,000

Less fixed costs ................................. <145,000> < 40,000>

Income (loss) from operations ....... $ (85,000) $ 60,000

Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of the current year. The discontinuance would have no effect on the total fixed costs or on the sales of Product U. What is the amount of change in net income for the current year that will result from the discontinuance of Product T?

Group of answer choices

$25,000 increase

$100,000 increase

$85,000 decrease

$60,000 decrease

None of the above

Flag question: Question 30Question 302.5 pts

A business is operating at 70% of capacity and is currently purchasing a part used in its manufacturing operations for $24 per unit. The unit cost for the business to make the part is $36, including fixed costs, and $28, not including fixed costs. If 15,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it?

Group of answer choices

$180,000 cost increase

$120,000 cost increase

$60,000 cost increase

$180,000 cost decrease

None of the above