Cora Corporation produces refrigerator units. The companys normal production and sales volume of Standard units is 3,000 units per month, and units sell for $870 each. The costs of manufacturing and marketing a Standard model are as follows:

Variable manufacturing cost per unit	$	240
Variable marketing cost per unit		40
Fixed product cost		300,000
Fixed period cost		240,000

Cora Corporation produces refrigerator units. The company's normal production and sales volume of Standard units is 3,000 units per month, and units sell for $870 each. The costs of manufacturing and marketing a Standard model are as follows: Variable manufacturing cost per unit Variable marketing cost per unit Fixed product cost Fixed period cost $ 240 40 300,000 240,000 The company is considering diversifying the product line to include two additional models, Economy and Deluxe, which would sell for $730 and $870 per unit, respectively. The costs of manufacturing these new models are as follows: Variable manufacturing cost Variable marketing cost Economy 42% below Standard 5% above Standard Deluxe $495 Twice Standard Total fixed product and period costs are expected to remain unchanged. Cora expects to sell 1,200 units of the Economy model and 950 units of Deluxe model per month. The company cannot expand its production capacity beyond its current level of 3,000 units. Required: 1. If Standard Model is the only product what would the Operating income be? Operating income 2-a. Suppose that a supplier is willing to supply 850 units of the Standard model at a price of $240 per unit. Also assume that the company can sell all that it can produce of the remaining two models. Should the offer of the supplier be accepted? Yes O No 2-b. Which of the model should produced? Standard Model Economy Model 2-b. Which of the model should produced? O Standard Model O Economy Model O Delux Model