1 DM (2.1 board feet of wood @ $25 per linear foot) $52.50 DL (.25 hour @ $25/hour) 6.25 VOH (3 MH @ 1.5/hour) 4.5 FOH (3 MH @ 25.50/hour) 76.5 TOTAL COST $139.75 CO Capacity 450,000 MH 9 Usage 325,000 MH 10 11 Offer 12 Units 40,000 13 Price $100 14 Special order MH 120,000 15 Change to DL 2 times 16 17 18 Capacity Check 19 Full capacity 450,000 given 20 Current usage 325,000 given 21 Special order needs 120,000 number of units in offer times MH per unit 2Z 5,000 23 Adequate capacity exists 24 25 Special Offer 26 Price 5 100.00 given 27 Cost 28 DM 52.50 given 29 DL 12.50 DL times 2 30 VOH 4.50 given 31 Increase to NI per unit 30.50 Prices less costs 32 33 Total increase to NI 1,220,000 INI per unit times units in offerGrasses Cacti Bushes 2 Sales 000'0EV 467,000 125,000 3 VC 210,000 280,200 55,000 CM 220,000 186,800 70,000 5 FC 6 Salaries 75,000 47,000 25,000 7 Advertising 25,000 30,000 35,000 Fertilizer 8,000 2,000 14,000 9 Land 10,000 25,000 30,000 10 Total Fixed Costs 118,000 104,000 104,000 11 Segment Margin 102,000 82,800 (34,000) 12 13 14 Lost sales (125,000) given 15 Costs Avoided 16 VC 55,000 given 17 Salaries 25,000 given 18 Advertising 35,000given 19 Fertilizer 14,000 given 20 Change to NI 4,000 lost sales less costs avoided 21 22 NI will increase by $4,000 if bushes is dropped. 23 24