109. Consider the following cost and production information for Hinsley Machine Parts, Inc. Quantity Part C-1849 Part D-1251 All other parts 72 60 570 Average Average Average Subtotal Per unit Subtotal Per unit Subtotal Per unit Direct costs Materials cost $126,000 $ 1,750 $232,500 $ 3,875 $1,565,220 $ 2,746 Conversion 72,000 82.500 1,375 658.350 1.155 Total direct costs $198,000 $ 2,750 $315,000 $5,250 $2.223.570 $ 3.901 Indirect Costs Indirect production Cost 500.400 6.950 417.000 6.950 3,961,500 6.950 Indirect operating Cost 390.600 5,425 325.500 5.425 3.092.250 5.425 Total indirect costs $ 891,000 $12,375 $ 742,500 $12,375 $7,053,750 $12,375 Total costs $1,089.000 $15,125 $1,057,500 $17.625 $9.277,320 $16.276 Additional information: . Sales revenue: $12,500,000 Beginning inventory: $3,375,000 . The only spending increase was for material cost due to increased production. All other spending as shown above was unchanged. . Sales of all parts are the same as the number of units produced. Hinsley Machine Parts, Inc. uses the throughput costing method. Required (a) Compute the throughput contribution margin, operating income and ending inventory for Hinsley Machine Parts, Inc. (b) Assume that production of part D-1251 increases by 25 units during the given period (sales remain constant). Re-compute the above figures. (c) Diana Holinger, the production foreperson, argues that an overall average cost is good enough; it is a waste of resources to compute the costs of individual parts. According to her, Hero's products are better than that of competitors. Therefore, all that needs to be done is to produce more so that the average cost figure goes down. Do you agree? Why or why not