1. Digital View Inc. has decided to discontinue its Basic model DVD player. They currently have a number of partially completed units on hand that have incurred $50 of costs per unit. They could complete them incurring the following additional unit costs: direct materials $10, direct labor $20, variable overhead $5, and fixed overhead $30. The fixed costs relate to depreciation on plant assets. If Digital View completes the DVD players, they can be sold at $100 per unit. However, another company is willing to buy the DVD players as is for $60. What should Digital View do? Q2. Fulcrum Co. is currently producing 20,000 components at a cost of $16 per unit. An outside supplier has offered to sell 20,000 units to Fulcrum Co. for $14 a unit. The production costs are shown below: Per Unit Direct materials $ 2 Direct Labor $4 Variable overhead $5 Fixed overhead (40% avoidable) $5 $ 16 Should Fulcrum make or buy the component? Assume the space used to produce the component could be leased to another company for $40,000. What decision should be made? Q3.X-Country Bikes Inc. is developing a new all-terrain bike that includes a carbon-fiber frame, lightweight tensile steel gears, airless foam rubber tires, and air shocks on both the wheels and the seat. The companys cross-functional team believes the bike can be sold for $2,500, and the company desires a 20% profit. a. What is the target cost per bike? b.If the unit variable costs are $1,200 and the total fixed costs are $2,000,000, how many bikes must be produced and sold to achieve the target cost per bike? Q4. Shelton Manufacturing is considering three different prices for their new personal digital planner: $60; $50; and $40. Variable costs per unit are $25. Monthly demand at each price is 15,000; 25,000; and 40,000, respectively. Monthly projected fixed costs $150,000. Determine the profit maximizing price