4. Starla Corporation is a specialty component manufacturer with idle capacity. Management would like to use its extra capacity to generate additional profits. A potential customer has offered to buy 4,320 units of component JOLT. Each unit of JOLT requires 6 units of material OX8 and 9 units of material POW6. Data concerning these two materials follow:

Material	Units in Stock				Original Cost Per Unit				Current Market Price Per Unit				Disposal Value Per Unit
OX8		30,600			$	3.84			$	4.30			$	3.59
POW6		39,480			$	3.44			$	3.40			$	2.25

Material OX8 is in use in many of the company's products and is routinely replenished. Material POW6 is no longer used by the company in any of its normal products and existing stocks would not be replenished once they are used up. What would be the relevant cost of the materials, in total, for purposes of determining a minimum acceptable price for the order for product JOLT? (CIMA adapted)

3. The Young Company has gathered the following information for a unit of its most popular product:

Direct materials	$	13
Direct labor		4
Overhead (40% variable)		15
Cost to manufacture		32
Desired markup (50%)		16
Target selling price	$	48

The above cost information is based on 10,100 units. A distributor has offered to buy 2,500 units at a price of $35 per unit. The distributor claims this special order would not disturb regular sales at $48. Special packaging and other selling expenses would be an additional $0.40 per unit for the special order. How many units of regular sales could be lost before this contract is not profitable?