1.

Button Company manufactures and sells dresses at a variable cost of $24 each and a fixed cost of x. It can sell 7,600 dresses at a selling price of $66 to earn an operating income of 149,200

(Option 1) or it can sell 6,100 dresses at a selling price of $78 and another 4,100 dresses at a selling price of $58

(Option 2). Which alternative should Button choose?

Option 1 operating income:	$149,200
Option 2 operating income:	$298,800
Button should choose	Option 2

Part 2

2. Clarke Corporation manufactures and sells a special kind of ball bearing. Its cost structure depends on the number of bearings it produces. Its fixed costs and variable manufacturing cost per unit for different ranges of production are described in the following table:

Clarke's sales director believes the company can sell 2,400 units at a selling price of $370; or 3,400 units at a price of $320; or 6,400 units at a price of $220.If it chose to sell 6,400 units, however, it would incur additional advertising costs of $66,000 and variable selling costs of $6 per unit. Should Clarke Corporation plan to produce and sell (a) 2,400 units (b) 3,400 units or (c) 6,400 units?

(a)

If Clarke sells 2,400 units, its operating income will be

$447,400

Part 3

(b)

If Clarke sells 3,400 units, its operating income will be

$489,400

Part 4

(c)

If Clarke sells 6,400 units, its operating income will be

$283,000

Part 5 Clarke should plan to produce and sell 3,400 units because this level of production and sales maximizes operating income

Corporation manufactures and sells a special kind of ball bearing. Its cost structure depends on the number of bearings it produces. Its fixed costs and variable manufacturing cost per unit for different ranges of production are described in the following table:

Production Range in Units	Fixed Costs	Variable Manufacturing Cost per Unit
1-3,000 units produced	$275,000	$69
3,001-6,000 units produced	$415,000	$54
6,001-10,000 units produced	$835,000	$29

Clarke's sales director believes the company can sell 2,400 units at a selling price of $370; or 3,400 units at a price of $320; or 6,400 units at a price of $220. If it chose to sell 6,400 units, however, it would incur additional advertising costs of $66,000 and variable selling costs of $6 per unit. Should Clarke Corporation plan to produce and sell (a)2,400 units (b) 3,400 units or (c) 6,400 units?

PLEASE HELP i DONT KNOW HOW TO GET THE LAST PART. i KEEP GETTING IT WRONG. Please see below. i think i am missing the advertising cost

(c) If Clarke sells 6,400 units, its operating income will be $283,000 ????