Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 7,600 units per year is: The normal selling price is $20 per unit. The company's capacity is 18,000 units per year. An order has been received from a mail-order house for 1,600 units at a special price of $15 per unit. This order would not affect regular sales. Requirement 1: If the order is accepted, by how much will annual profits be increased or decreased? (The order will not change the company's total fixed costs.) (Input the amount as positive value. Omit the "$" sign in your response.) Requirement 2: Assume the company has 1,000 units of this product left over from last year that are inferior to the current model. The units must be sold through regular channels at reduced prices. What unit cost is relevant for establishing a minimum selling price for these units? (Round your answer to 2 decimal places. Omit the *'$" sign in your response.) Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company s most recent monthly contribution format income statement follows: A study indicates that $373,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 13% decrease in the sales of the Hardware Department. Required: If the Linens Department is dropped, what will be the effect on the net operating income of the company as a whole? (Input the amount as positive value. Omit the "$" sign in your response.) Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 7,600 units per year is: The normal selling price is $20 per unit. The company's capacity is 18,000 units per year. An order has been received from a mail-order house for 1,600 units at a special price of $15 per unit. This order would not affect regular sales. Requirement 1: If the order is accepted, by how much will annual profits be increased or decreased? (The order will not change the company's total fixed costs.) (Input the amount as positive value. Omit the "$" sign in your response.) Requirement 2: Assume the company has 1,000 units of this product left over from last year that are inferior to the current model. The units must be sold through regular channels at reduced prices. What unit cost is relevant for establishing a minimum selling price for these units? (Round your answer to 2 decimal places. Omit the *'$" sign in your response.) Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company s most recent monthly contribution format income statement follows: A study indicates that $373,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 13% decrease in the sales of the Hardware Department. Required: If the Linens Department is dropped, what will be the effect on the net operating income of the company as a whole? (Input the amount as positive value. Omit the "$" sign in your response.)
