15.

Jaybird Company operates in a highly competitive market where the market price for its product is $100 per unit. Jaybird desires a 30% profit per unit. Jaybird expects to sell 5,000 units. Additional information is as follows:

Variable Costs per Unit		Fixed Costs (total)
Direct materials	$ 15	Overhead	$ 45,000
Direct labor	16	General and administrative	18,000
Overhead	14
General and administrative	20

To achieve the target cost per unit, Jaybird must reduce total expenses by how much?

16. Graham Corporation has 1,000 cartons of oranges that were harvested at a cost of $28,200. The oranges can be sold as is for $32,880. The oranges can be processed further into orange juice at an additional cost of $12,725 and be sold at a price of $49,150. The incremental income (loss) from processing the oranges into orange juice would be:

17.

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

Contribution margin income statement	Per Unit	Annual Total
Sales (16,200 units)	$ 12.00	$ 194,400
Variable costs
Direct materials	1.50	24,300
Direct labor	4.00	64,800
Overhead	1.00	16,200
Contribution margin	5.50	89,100
Fixed costs
Fixed overhead	1.00	16,200
Fixed selling and administrative expenses	1.40	22,680
Income	$ 3.10	$ 50,220

A foreign company offers to buy 5,400 units at $7.50 per unit. In addition to variable costs, selling these units would add a $0.25 selling expense for export fees. Lattimers annual production capacity is 26,200 units. If Lattimer accepts this additional business, the special order will yield a:

18.

Pinkin Incorporated needs to determine a price for a new phone model. Pinkin desires a 25% markup on the total cost of the phone. Pinkin expects to sell 30,000 phones. Additional information is as follows:

Variable Costs per Unit		Fixed Costs (total)
Direct materials	$ 27	Overhead	$ 85,000
Direct labor	52	General and administrative	65,000
Overhead	32
General and administrative	62

Using the total cost method what price should Pinkin charge?

19.

Sooky has a spotter truck with a book value of $60,000 and a remaining useful life of five years. At the end of the five years the spotter truck will have a zero-salvage value. iSooky can purchase a new spotter truck for $140,000 and receive $33,000 in return for trading in its old spotter truck. The old spotter truck has variable manufacturing costs of $95,000 per year. The new spotter truck will reduce variable manufacturing costs by $27,000 per year over the five-year life of the new spotter truck. The total increase or decrease in income by replacing the current spotter truck with the new truck is:

20.

Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $49,500 as shown below.

Segment Income (Loss)
Sales	$ 990,000
Variable costs	490,000
Contribution margin	500,000
Fixed costs	549,500
Income (loss)	$ (49,500)

If the backpack division is dropped, all $490,000 of its variable costs are avoidable, and $219,800 of its fixed costs are avoidable. The impact on Granfields income from eliminating this business segment would be: