## Answers

5 | ||

Variable cost of goods sold | 6.66 | =412254/61900 |

Incremental revenue | 47960 | =4360*11 |

Incremental costs: | ||

Variable cost of goods sold | 29038 | =4360*6.66 |

Total Incremental costs | 29038 | |

Profits increase | 18922 | |

Option E $18,922 is correct | ||

6 | ||

Increase in cost of goods sold | 4098 | =4360*(0.74+0.20) |

Rental of Equipment | 1000 | |

Total effect on profit | 5098 | |

Option D $5,098 is correct | ||

7 | ||

Reduction in Profits | 30950 | =61900*(19-18.50) |

Option C $30,950 is correct |

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