Best trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. best trim estimates that 17,000 spark plugs will be required each month. a supplier quotes a price of $9 per spark plug. the supplier also offers a special discount option: if all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be provided. best trim can invest its cash at 10% per year. it costs best trim $260 to place each purchase order. answer the following questions: 1. what is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of 12 monthly purchases of 17,000 units per order? 2. would this opportunity cost be recorded in the accounting system? why? 3. should best trim purchase 204,000 units at the start of the year or 17,000 units each month? show your calculations.4. what other factors should best trim consider when making its decision?

Selected information about income statement accounts for the reed company is presented below (the company's fiscal year ends on december 31): 2018 2017sales $ 4,400,000 $ 3,500,000cost of goods sold 2,860,000 2,000,000administrative expenses 800,000 675,000selling expenses 360,000 312,000interest revenue 150,000 140,000interest expense 200,000 200,000loss on sale of assets of discontinued component 50,000 —on july 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by gaap. the assets of the component were sold on september 30, 2018, for $50,000 less than their book value. results of operations for the component (included in the above account balances) were as follows: 1/1/18-9/30/18 2017 sales $ 400,000 $ 500,000 cost of goods sold (290,000 ) (320,000 )administrative expenses (50,000 ) (40,000 )selling expenses (20,000 ) (30,000 )operating income before taxes $ 40,000 $ 110,000 in addition to the account balances above, several events occurred during 2018 that have not yet been reflected in the above accounts: a fire caused $50,000 in uninsured damages to the main office building. the fire was considered to be an infrequent but not unusual event.inventory that had cost $40,000 had become obsolete because a competitor introduced a better product. the inventory was sold as scrap for $5,000.income taxes have not yet been recorded.required: prepare a multiple-step income statement for the reed company for 2018, showing 2017 information in comparative format, including income taxes computed at 40% and eps disclosures assuming 300,000 shares of common stock. (amounts to be deducted should be indicated with a minus sign. round eps answers to 2 decimal places.)