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Ahrens Tech incurs costs of $33 per unit ($21 variable and $12 fixed) to make a widget it normally sells for $58. Ahrens has received two special offers: Wholesaler A offers to buy 9,000 units at $46 each and Wholesaler B offers to buy 15,500 units at $42 each. Assuming Ahrens has the capacity to accept only one of these offers, which one should it accept? Ahrens should accept ofter B because it will result in $100,500 more in net income than offer A Ahrens should accept offer B because it will result in $36,000 more in net income than offer A. O Ahrens should accept offer A because it will result in $85,500 more in net income than offer B. Ahrens should accept offer A because it will result in $62,000 more in net income than offer B. MB Co. manufactures electric toothbrushes. Each toothbrush requires a small motor, Part M4. MB is currently manufacturing the motor, but another company, RW, has offered to supply it for $11 per unit. Each motor requires $2.00 of direct material, $4.00 of direct labor. $3.00 of variable manufacturing overhead, and $1.50 fixed manufacturing overhead. If MB accepts RW's offer all fixed manufacturing overhead costs will continue Calculate the maximum price MB should be willing to pay. $9.00 $11.00 O $15.75 O $10.50 Speedy Scooters sells unassembled scooters for $55 each Variable production costs for each scooter are $8 and fixed production costs are $13. Speedy is considering selling the scooters fully assembled. It estimates variable costs for assembling one scooter will be $2 and fixed costs will be $7. In order for the assembled scooters to be more profitable than the unassembled scooters, they must sell for more than each O $69 $62 O $57 $64 CS Enterprises has a machine that originally cost $250,000. Its current book value is $75,000 and its remaining useful life is two years CS is considering a replacement that costs $212,000 and has a two-year useful life. The new machine will decrease variable costs from $84,000 to $73,000. If the old machine has a scrap value of $3,000, what should CS do? Why? CS should retain the old machine because the company will sustain a $187,000 decrease in net income if it purchases the new machine CS should retain the old machine because it will sustain a $355,000 decrease in net income if it purchases the new machine. OCS should purchase the new machine because it will realize a $146,000 increase in net income if it purchases the new machine. CS should purchase the new machine because it will realize a $22,000 increase in net income if it purchases the new machine The Iris division of Flower Company has sales of $350,000, fixed expenses of $275,000, and variable expenses of $150,000. If the segment is eliminated, 60% of the fixed costs will be eliminated. What will be the incremental effect on Flower Company's net income if the segment is eliminated? $110,000 decrease $165,000 increase O $35.000 decrease $75,000 increase

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