1. The Cotton Company manufactures slippers and sells them at $8 a pair. Variable manufacturing cost is 53.00 a pair, and allocated fixed manufacturing cost is $0.75 a pair. It has enough idle capacity available to accept a one-time-only speci order of 15,000 pairs of slippers at $3.75 a pair. Cotton will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepled without affecting normal sales: (a) $0 (b) S11,250 increase, (c) S45,000 Increase, or (d) $56,250 increase? Show your calculations. 2. The Sacramento Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 20,000 units of Part No. 498 is as follows: (Click to see the manufacturing cost per unit.) Read part 2's requirement. FREE D. $45,000 increase 2. The Sacramento Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 20,000 units of Part No. 498 is as follows: (Click to see the manufacturing cost per unit.) For Sacramento to achieve an overall savings of $15,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be which of the following: (a) $100,000, (b) $55,000, $135,000 or (d) $140,000? Show your calculations. What other factors might Sacramento consider before outsourcing to Pane? Begin by selecting the labels to calculate the relevant costs that would have to be saved and then enter in the supporting calculations, Data table Cost to purchase Total relevant costs of making: (per unit) Variable manufacturing costs Fixed costs oliminated S S 10 38 17 Direct materials Variable direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead allocated Total manufacturing cost per unit Costs saved by not making * units in the offer Total costs saved Extra costs of purchasing outside Minimum savings required Necessary relevant costs to be saved 18 S 83 0 The Pane Company has offered to sell 20,000 units of Part No. 498 to Sacramento for $78 per unit. Sacramento will make the decision to buy the part from Pane if there is an overall savings of at least $15,000 for Sacramento. If Sacramento accepts Pane's offer, S11 per unit of the fixed overhead allocated would eliminated. Furthermore, Sacramento has determined that the released Faciliti muld be ured FAU must in the manufacture of Dart No 575