1a. Lusk Corporation produces and sells 15,100 units of Product X each month. The selling price of Product X is $21 per unit, and variable expenses are $15 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $72,000 of the $101,000 in fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the companys overall net operating income would:

1b. Nesmith Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below:

	Alternative A	Alternative B
Materials costs	$44,000	$59,000
Processing costs	$50,000	$50,000
Equipment rental	$11,800	$28,900
Occupancy costs	$19,900	$30,800

What is the differential cost of Alternative B over Alternative A, including all of the relevant costs?

1c. The management of Kabanuck Corporation is considering dropping product V41B. Data from the company's accounting system appear below:

Sales	$919,000
Variable expenses	$398,000
Fixed manufacturing expenses	$333,000
Fixed selling and administrative expenses	$240,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $200,000 of the fixed manufacturing expenses and $111,000 of the fixed selling and administrative expenses are avoidable if product V41B is discontinued.

1e. Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 56,000 units per month is as follows:

Direct materials	$50.60
Direct labor	$9.70
Variable manufacturing overhead	$2.70
Fixed manufacturing overhead	$20.50
Variable selling & administrative expense	$5.00
Fixed selling & administrative expense	$24

The normal selling price of the product is $118.10 per unit.

An order has been received from an overseas customer for 3,600 units to be delivered this month at a special discounted price. This order would have no effect on the company's normal sales and would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $2.80 less per unit on this order than on normal sales.

Direct labor is a variable cost in this company.

Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $92.40 per unit. By how much would this special order increase (decrease) the company's net operating income for the month?