Easton Company makes and sells scooters.Easton incurred the following costs in its most recent fiscal year: $\begin{array}{|l|l|} \hline{\text { Cost Items Appearing }} & \text { on the Income Statement } \\ \hline \text { Materials cost (\$10 per unit) } & \text { Depreciation on manufacturing equipment } \\ \hline \text { Company president's salary } & \text { Salaries of administrative personnel } \\ \hline \text { Labor cost (\$4 per unit) } & \text { Research and development costs } \\ \hline \text { Advertising costs }(150,000 \text { per vear) } & \text { Real estate taxes on factory } \\ \hline \text { Shipping and handling (\$0.15 per unit) } & \text { Inspection costs } \\ \hline \end{array}$ Easton can currently purchase the scooters it makes from another company.If the company purchases the scooters,Easton would still continue to use its own logo,sales staff,and advertising programs.Which of the following costs would be classified as a unit-level cost?

A) Company president's salary B) Depreciation on manufacturing equipment C) Materials cost D) Real estate taxes on factory A) Company president's salary B) Depreciation on manufacturing equipment C) Materials cost D) Real estate taxes on factory

QRC Company is trying to decide which one of two alternatives it will accept.The costs and revenues associated with each alternative are listed below: \[\begin{array} { | l | r | r | r | } \hline & { \text { Alterrative A } } & \text { Alternative B } \\ \hline \text { Projected reverue } & \$ 62,500 & \$ 75,000 \\ \hline \text { Unit-level costs } & 12,500 & 18,000 \\ \hline \text { Batch-level costs } & 6,250 & 12,000 \\ \hline \text { Product-level costs } & 7,500 & 8,500 \\ \hline \text { Facility-level costs } & 5,000 & 6,250 \\ \hline \end{array}\] What is the differential revenue for this decision?

A) $25,000 B) $12,500 C) $62,500 D) $75,000 A) $25,000 B) $12,500 C) $62,500 D) $75,000

The Mansfield Company manufactures and sells two lines of fishing rods.During the most recent accounting period,the Pro line and the Novice line sold 15,000 and 2,000 units,respectively.The company's most recent financial statements are shown below: $\begin{array}{c} \begin{array}{|l} \hline\\ \hline \text {Sales}\\ \hline \text {Less cost of goods sold:}\\ \hline \text {Unit-level production cost}\\ \hline \text {Depreciation, production equipment}\\ \hline \text {Gross margin}\\ \hline \text {Less operating expenses:}\\ \hline \text {Unit-level selling and admin. Costs}\\ \hline \text {Corporate-level facility expenses (fixe d)}\\ \hline \text {Net income (loss)}\\ \hline \end{array} \begin{array}{|l} \hline \text {Pro}\\ \hline\$ 900,000\\ \hline\\ \hline600,000 \\ \hline125,000 \\ \hline \$ 175,000\\ \hline\\ \hline40,000 \\ \hline 36,000 \\ \hline \$ \quad 99,000 \\ \hline \end{array} \begin{array}{|l|} \hline\text { Novice } \\ \hline\$ \quad 240,000 \\ \hline\\ \hline135,000 \\ \hline 50,000 \\ \hline \$55,000 \\ \hline\\ \hline 65,000 \\ \hline 36,000 \\ \hline \$ \quad(46,000) \\ \hline \end{array} \end{array}$ Based on this information,the company should: The word "Costs" should not be capitalized mid-way down.Also,change "admin." to: Administrative The cell should read: Unit-level selling and administrative costs

A) Eliminate the Novice line because it is operating at a loss. B) Keep the Novice line because it contributes $40,000 to total profitability. C) Keep the Novice line because it contributes $55,000 to total profitability. D) It is impossible to determine with the given information. The word "Costs" should not be capitalized mid-way down.Also,change "admin." to: Administrative The cell should read: Unit-level selling and administrative costs A) Eliminate the Novice line because it is operating at a loss. B) Keep the Novice line because it contributes $40,000 to total profitability. C) Keep the Novice line because it contributes $55,000 to total profitability. D) It is impossible to determine with the given information. The word "Costs" should not be capitalized mid-way down.Also,change "admin." to: Administrative The cell should read: Unit-level selling and administrative costs