1. Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are listed below:

	Alternative M				Alternative N
Supplies costs	$	73,000			$	66,000
Assembly costs	$	47,000			$	47,000
Power costs	$	27,000			$	41,000
Inspection costs	$	40,000			$	29,000

Required:

a. Which costs are relevant and which are not relevant in the choice between these two alternatives?

b. What is the differential cost between the two alternatives?

2. Key Corporation is considering the addition of a new product. The expected cost and revenue data for the new product are as follows:

Annual sales		2,500	units
Selling price per unit	$	304
Variable costs per unit:
Production	$	125
Selling	$	49
Avoidable fixed costs per year:
Production	$	50,000
Selling	$	75,000
Allocated common fixed corporate costs per year	$	55,000

If the new product is added, the combined contribution margin of the other, existing products is expected to drop $65,000 per year. Total common fixed corporate costs would be unaffected by the decision of whether to add the new product.

If the new product is added next year, the financial advantage (disadvantage) resulting from this decision would be:

3. Holton Company makes three products in a single facility. Data concerning these products follow:

	Product
	A		B		C
Selling price per unit	$	90.30	$	77.40	$	139.30
Direct materials	$	39.40	$	43.20	$	83.80
Direct labor	$	28.40	$	13.80	$	21.50
Variable manufacturing overhead	$	5.50	$	4.60	$	10.00
Variable selling cost per unit	$	7.70	$	3.30	$	6.10
Mixing minutes per unit		13.70		2.00		2.00
Monthly demand in units		3,000		1,000		2,000

The mixing machines are potentially the constraint in the production facility. A total of 14,000 minutes are available per month on these machines.

Direct labor is a variable cost in this company.

Required:

a. How many minutes of mixing machine time would be required to satisfy demand for all three products?

b. How much of each product should be produced to maximize net operating income?

c. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity?

I truly need all three questions, so if you complete them I will make sure to rate your answer as helpful. Thanks!