Ace Inc. produces custom widgets. The cost structure for each widget it manufactures is as follows: Direct materials $4.00 per unit
Direct labor $6.00 per unit
Variable manufacturing overhead $2.00 per unit

Allocated fixed manufacturing overhead $10.00 per unit (based on 10,000 units) Beta Corp. offers to sell 10,000 widgets to Ace for $16.00 per unit. The widgets would be of equal or better quality and Beta can deliver 10,000 units with no problem. If Ace accepts the offer, none of its fixed costs will be avoidable.

If Ace accepts the offer and buys 10,000 widgets from Beta:

a. Ace will save $60,000.
b. Ace will spend $60,000 more.
c. Ace will spend $40,000 more.
d. Ace will save $40,000

Guardian inc. is trying to develop an asset-financing plan. the firm has $450,000 in temporary current assets and $350,000 in permanent current assets. guardian also has $550,000 in fixed assets. assume a tax rate of 40 percent. a. construct two alternative financing plans for guardian. one of the plans should be conservative, with 70 percent of assets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. the current interest rate is 12 percent on long-term funds and 7 percent on short-term financing. compute the annual interest payments under each plan.

Vulcan flyovers offers scenic overflights of mount st. helens, the volcano in washington state that explosively erupted in 1982. data concerning the company’s operations in july appear below: vulcan flyovers operating data for the month ended july 31 actual results flexible budget planning budget flights (q) 56 56 54 revenue ($350.00q) $ 16,500 $ 19,600 $ 18,900 expenses: wages and salaries ($3,300 + $91.00q) 8,354 8,396 8,214 fuel ($31.00q) 1,904 1,736 1,674 airport fees ($870 + $35.00q) 2,730 2,830 2,760 aircraft depreciation ($11.00q) 616 616 594 office expenses ($240 + $1.00q) 464 296 294 total expense 14,068 13,874 13,536 net operating income $ 2,432 $ 5,726 $ 5,364 the company measures its activity in terms of flights. customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. required: 1. prepare a flexible budget performance report for july that includes revenue and spending variances and activity variances.

What are two benefits of consumer programs