Neutron Co. manufactures and sells battery testers and solenoid testers for quick, easy use around the home. The following information related to these two products has been gathered from Neutron's accounting records for the most recent year:

Furthermore, the total unit cost of each product is calculated as follows:

Both fixed manufacturing and fixed marketing and administrative costs are assigned to products based on the number of units sold. That is, Neutron's accountant takes the total fixed costs incurred and divides them by the total number of units sold to arrive at a fixed cost per unit. Moreover, Neutron expects to incur $420,000 in total fixed costs each year regardless of production volume. Because Neutron's shop produced 30,000 total units in the most recent year, each product was assigned $420,000/30,000 $14 per unit in fixed costs.
Required:
a. What was Neutron's overall profit for the most recent year? What was Neutron's reported profit for each product?
b. What was Neutron's total contribution margin for the most recent year? What was Neutron's contribution margin on each product?
c. Since the unit cost of the solenoid tester exceeds the unit price, Neutron believes that the business would be more profitable if it stopped producing solenoid testers. Is this true? By how much will Neutron's profit increase or decrease if the company stops producing and selling solenoid testers?
d. Based on your answers to parts (a) through (c), what inferences do you draw about the value of expressing fixed costs as the amount allocated per unit rather than the total of the expenditure?

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Battery Tester Solenoil Tester Sales in units Unitsng price Total unit cost 20,000 $35 $28 10,000 $20 $22 Battery Tester Solenoid Tester Fixed costs $10 per uniS10 per unit Marketing & administrative S4 per n $ er unit Manufacturing ariable costs: S12 per unitS6 per unit Marketing & adminisratveS2 per unit$2 per unit $28 per u $22 per unit anufacturing Total