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Purple Company produced 50 defective units last month at a per-unit variable manufacturing cost of $30. The defective units were discovered before they were shipped out of the factory. Purple can sell them "as is" for an additional $20 per unit or can rework them at a cost of $15 and sell them at the regular price of $50. In this scenario, the $30 per unit manufacturing cost is a cost. Maroon Company spends $500 each month to make a batch of goo. The goo naturally separates into a top layer, Product T, and a bottom layer, Product B. There are 10 gallons of product T and 100 gallons of Product B per batch of goo. Product T sells for $10 per gallon. Product T can be converted to Product T " for a cost of $100. Product T sells for $18 per gallon. Product B sells for $1 per gallon and can be converted to Product B for $100. Product B sells for $3 per gallon. Which products should Maroon Company sell? A company is considering a special order for 1,000 units to be priced at $9.00 (the normal price would be $11.50 ). The order would require specialized materials costing $5.00 per unit. Direct labor and variable factory overhead would cost $3.00 per unit. $2.00 of fixed factory overhead would be allocated to each unit of the special order. The company has excess capacity and accepting the order would not raise total fixed factory overhead. The warehouse, however, would have to spend $2,000 to store the materials and finished units safely. What is the net relevant cash flow for the special order? Quiet Company currently makes 1,000 units of component PDQ, which it uses to make some of its products. Quiet has the following information about its per-unit production costs for PDQ: Of the fixed overhead, 1/3 is an allocation of facility costs. Loud Company has offered to sell component PDQ to Green for $48 per unit. If Quiet Company decides to stop making component PDQ and purchase it from Loud Company, what will be the change in Quiet Company's cash flow? Extra Wet Products, Inc. makes two product lines, sinks and bathtubs. Sinks generate $300 in revenue and have total variable costs of $200. Direct fixed costs related to sinks are $150. Bathtubs generate $700 in revenue and have total variable costs of $300. Direct fixed costs related to bathtubs are $300. Facility costs are $100, half of which is allocated to each product line. What is the change in cash flow for Extra Wet Products if it eliminates the sink product line

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