Tee Incorporated has obsolete raw materials which are carried in the books at its cost of 660,000. If these raw materials are sold to animal feed makers, it could fetch 120,000. The company may also sell these raw materials to a materials recovery facility for 150,000 but they would need to incur 40,000 to transport the raw materials.

Required:

How much is the sunk cost?

 
2- Jay Incorporated uses the cost formula Y = 46,500 + 2.45X for maintenance cost, where the independent variable is operating hours. If it is expected that operating hours for the upcoming year is 32,600 hours, total variable maintenance cost at this level would amount to?
 

3- After performing the regression analysis to separate the variable and fixed components of their electricity cost, Mee Incorporated was able to come up with the cost formula Y = 32,200 + 4.0X where X is the number of units produced.

Required:

Determine the total fixed electricity cost of Mee if production in the succeeding period reaches 12,140.

Answer rating: 100% (QA)

SOLUTION 1 The sunk cost is the cost that has already been incurred and cannot be recovered regardle... View the full answer