18.

Mantis Inc. is facing a problem with their 4th quarter absorption costing net operating income on December 25. Their net operating income target is $236,000 and the data so far is as follows:

Sales Revenue	$600,000	($200/unit)
Variable COGS	$240,000	($80/unit)
Fixed manufacturing overhead	$70,000
Fixed S&A	$50,000
Variable S&A: Commission on Sales	3%
Finished Goods Inventory as of December 25	500 units

Up until this quarter, Mantis Inc. has had a policy of having zero inventories at the end of each quarter. No further sales are possible during the year. Mr. B, the CEO, is planning to produce more units for inventory in the last week of December to meet the net operating income target.

(Q.) How many total units (including the units produced before December 25) the company needs to produce in the fourth quarter to meet the net operating income target if the sales commission is left unchanged? (Express your answer to the nearest whole number.)

(A.) units=?

19.

Wasp company produces three products with the following information:

	Product
	A	B	C
Selling price per unit	$17	$19	$26
Variable cost per unit	$8	$10	$12
Machine-hours per unit (MH/unit)	2	3	4

The company has a limit of 13,800 machine-hours available per month and a monthly fixed cost of $6,500. The demand for each of the products is 2,500 units per month.

The companys goal is to maximize its profitability.

Suppose the company can rent a machine that will provide an additional 1,890 machine-hours per month.

(Q.) What is the maximum monthly rent the company should be willing to pay for this machine (assuming theyve made optimal use of their own machine)?