Reference no: EM132908814

Problem 1: What of the following would not be relevant in a make-or-buy decision?

Select one:

a. Unavoidable variable costs

b. Avoidable fixed cost

c. Opportunity costs

d. Incremental fixed costs

Problem 2: NF Toy Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $24 and NF Toy would sell it for $52. The cost to assemble the product is estimated at $17 per unit and the company believes the market would support a price of $68 on the assembled unit. What decision should NF Toy make?

Select one:

a. Process further, the company will be better off by $11 per unit

b. Process further, the company will be better off by $23 per unit

c. Sell before assembly, the company will be better off by $16 per unit

d. Sell before assembly, the company will be better off by $1 per unit

Problem 3: Hi-Tech Inc. has several outdated computers that cost a total of $17,800 and could be sold as scrap for $4,600. They could be updated for an additional $2,400 and sold. If Hi-Tech updates the computers and sells them, net income will increase by $9,000.

What amount would be considered sunk costs?

Select one:

a. $17,800

b. $2,400

c. $20,200

d. $9,000