Baird Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 32,000 and 66,000 units per year Revenue (40,000 units $11) Unit-level variable costs 440,000 Materlals cost (40,000$3) Labor cost (40,000 $2) Manufacturing overhead (40,000 $0.50 Shipping and handling {40,000 $0.32) Sales commissions (40,000$2) (120,000) 80,000 (20,000 (12,800) 80,000) 127,200 Contribution nargin Pixed expenses Advertising costs Salary of production supervisor Allocated company wide facility-level expenses (22,000) (62,000) ( 82,000 Net loss (38, 800) Required a. A large discount store has approached the owner of Baird about buying 9,000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Baird's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $6.20 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Baird accept the special order? b-1. Baird has an opportunity to buy the 40,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Baird's quality standards. Baird could continue to use its own logo, advertising program, and sales force to distribute the products. Should Baird buy the calculators or continue to make them? b-2. Calculate the total cost for Baird to make and buy the 40,000 calculators. b-3. Should Baird buy the calculators or continue to make them, if the volume of sales were increased to 66,000 units? c. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination increase or decrease commissions on the transaction would be involved, but the discount store is willing to pay only $6.20 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Baird accept he special order? b-1. Baird has an opportunity to buy the 40,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Baird's quality standards. Baird could continue to use its own logo, advertising program, and sales force to distribute the products. Should Baird buy the calculators or continue to make them? b-2. Calculate the total cost for Baird to make and buy the 40,000 calculators. b-3. Should Baird buy the calculators or continue to make them, if the volume of sales were increased to 66,000 units? c. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination increase or decrease profitability? Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 Required C A large discount store has approached the owner of Baird about buying 9,000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Baird's existing customers. Because the offer was made directly to the owner, no calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Baird accept the special order? (Negative amounts should be indicated by a minus sign.) sales commissions on the transaction would be involved, but the discount store is willing to pay only $6.20 per Show less margin (loss) Should Baird accept the special order? Required B1 > Required a. A large discount store has approached the owner of Baird about buying 9,000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Baird's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $6.20 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Baird accept the special order? b-1. Baird has an opportunity to buy the 40,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Baird's quality standards. Baird could continue to use its own logo, advertising program, and sales force to distribute the products. Should Baird buy the calculators or continue to make them? b-2. Calculate the total cost for Baird to make and buy the 40,000 calculators b-3. Should Baird buy the calculators or continue to make them, if the volume of sales were increased to 66,000 units? c. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination increase or decrease profitability? Complete this question by entering your answers in the tabs below. Required A Required B1Required B2 Required BRequiredc Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination increase or decrease profitability? (Negative amounts should be indicated by a minus sign.) Contribution to profit (loss) Should it be eliminated from the companys operations? Required B3 Required C
