申論題

二、 20% Wisdom Industries manufactures and sells two products: Simple and Deluxe. The results of operations for 2017 follow.
                               
Fixed manufacturing costs included in cost of goods sold amount to $8 per unit for Simple and $25 per unit for Deluxe. Variable selling expenses are $10 per unit for Simple and $30 per unit for Deluxe； remaining selling amounts are fixed.
Required:
Answer the following questions independently.
 1. In 2018, the company plans to sell more Simple. Assume that to do so the company would have to acquire additional equipment costing $24,000 with a one-year useful life and zero residual value.