Ruth company produces 1,000 units of a necessary component with the following costs: direct materials direct labor variable overhead fixed overhead $34,000 15,000 9,000 10,000 ruth company could avoid $6,000 in fixed overhead costs if it acquires the components externally. if cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum extenal price that ruth company would accept to acquire the 1,000 units externally? a) $59.000 b) $64,000 c) $58,000 d) $62,000 which of the following will always be a relevant cost? a) sunk cost b) opportunity cost c) variable cost d) fixed cost 7. use the following to answer questions 8-10 chung inc. is considering the replacement of a piece of equipment with a newer model. the following data has been collected: old equipment new equipment s225,000 90,000 300,000 $375,000 purchase price accumulated depreciation annual operating costs if the old equipment is replaced now, it can be sold for 560,000. both the old equipment's remaining useful life and the new equipment's useful life is 5 years. 240,000 8. which of the folowing amounts is irrelevant to the replacement decision? a) $60,000 b) $135,000 c) s315,000 d) $375,000 9. the net advantage (disadvantage) of replacing the old equipment with the new equipment is a) s(75,000) b) s(15,000) c) $60,000 d) $90,000

Selected information about income statement accounts for the reed company is presented below (the company's fiscal year ends on december 31): 2018 2017sales $ 4,400,000 $ 3,500,000cost of goods sold 2,860,000 2,000,000administrative expenses 800,000 675,000selling expenses 360,000 312,000interest revenue 150,000 140,000interest expense 200,000 200,000loss on sale of assets of discontinued component 50,000 —on july 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by gaap. the assets of the component were sold on september 30, 2018, for $50,000 less than their book value. results of operations for the component (included in the above account balances) were as follows: 1/1/18-9/30/18 2017 sales $ 400,000 $ 500,000 cost of goods sold (290,000 ) (320,000 )administrative expenses (50,000 ) (40,000 )selling expenses (20,000 ) (30,000 )operating income before taxes $ 40,000 $ 110,000 in addition to the account balances above, several events occurred during 2018 that have not yet been reflected in the above accounts: a fire caused $50,000 in uninsured damages to the main office building. the fire was considered to be an infrequent but not unusual event. inventory that had cost $40,000 had become obsolete because a competitor introduced a better product. the inventory was sold as scrap for $5,000.income taxes have not yet been recorded. required: prepare a multiple-step income statement for the reed company for 2018, showing 2017 information in comparative format, including income taxes computed at 40% and eps disclosures assuming 300,000 shares of common stock. (amounts to be deducted should be indicated with a minus sign. round eps answers to 2 decimal places.)