1.

Lattimer Company had the following results of operations for the past year:

Sales (15,000 units at $12.40)				$	186,000
Variable manufacturing costs	$	103,500
Fixed manufacturing costs		27,000
Selling and administrative expenses (all fixed)		42,000			(172,500	)
Operating income				$	13,500

A foreign company offers to buy 5,800 units at $8.30 per unit. In addition to existing costs, selling these units would add a $0.33 selling cost for export fees. Lattimers annual production capacity is 25,000 units. If Lattimer accepts this additional business, the special order will yield a

2.Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.50 per unit. Bluebird currently produces and sells 75,000 units at $6.50 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesalers name and would not affect Bluebirds sales through its normal channels. Production costs for these units are $3.65 per unit, which includes $2.00 variable cost and $1.65 fixed cost. If Bluebird accepts this additional business, the effect on net income will be

3.Logan Company can sell all of the standard and premier products they can produce, but it has limited production capacity. It can produce 8 standard units per hour or 5 premier units per hour, and it has 35,000 production hours available. Contribution margin per unit is $23 for the standard product and $25 for the premier product. What is the total contribution margin if Logan chooses the most profitable sales mix?

4.Granfield Company has a piece of manufacturing equipment with a book value of $36,000 and a remaining useful life of four years. At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $21,200. Granfield can purchase a new machine for $112,000 and receive $21,200 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $18,200 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is: