Canyon Gear operates at full capacity making 50,000 units pe…

Canyon Gear operates at full capacity making 50,000 units per month. Normal unit data: selling price $40; variable manufacturing cost $22; variable selling cost $4. A special order for 6,000 units is offered at $33 each. The order would not require any variable selling costs. Accepting the order would reduce regular sales by 6,000 units. What is the impact on monthly operating income if the special order is accepted?

A company is evaluating whether to replace equipment. The ol…

A company is evaluating whether to replace equipment. The old machine can be sold today for $12,500. The new machine costs $120,000 and will have a salvage value of $9,000 at the end of its 5-year life. Annual variable manufacturing costs would decrease by $22,000 if the new machine is purchased. Fixed costs do not change, and ignore time value of money. What is the total impact on operating income over 5 years if the machine is replaced?

A joint process produces Product J. At the split-off point,…

A joint process produces Product J. At the split-off point, Product J can be sold for $210,000 or processed further and sold for $248,000. Additional processing costs are $34,000. Joint costs incurred before split-off are unavoidable. What should management do for Product J, and what is the impact on income?