1.Mighty Safe Fire Alarm is currently buying 55,000 motherboards from MotherBoard, Inc., at a price of $67 per board. Mighty Safe is considering making its own boards. The costs to make the board are as follows: direct materials, $30 per unit; direct labor, $9 per unit; and variable factory overhead, $15 per unit. Fixed costs for the plant would increase by $72,000. Which option should be selected and why? a.buy, $642,950 increase in profits b.buy, $72,000 increase in profits c.make, $642,950 increase in profits d.make, $715,000 increase in profits

2.

Stryker Industries received an offer from an exporter for 26,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:

Domestic unit sales price	$25
Unit manufacturing costs:
Variable	14
Fixed	5

The amount of profit or loss from acceptance of the offer is a

a.$442,000

b.$650,000

c.$78,000

d.$364,000

3.

Ptarmigan Company produces two products. Product A has a contribution margin of $67.20 and requires 12 machine hours. Product B has a contribution margin of $96.90 and requires 17 machine hours. Determine the most profitable product assuming the machine hours are the constraint. If required, round your answers to two decimal places.

Contribution margin per machine hour:
Product A
Product B

Product is the most profitable.