Euclid Fashions, Inc., is introducing a sports jacket. A standard cost card has been prepared for the new jacket, as shown below:

	Standard Quantity or Hours	Standard Price or Rate		Standard Cost
Direct materials	2.0 yards	$	4.60 per yard	$	9.20
Direct labor	1.4 hours	$	10.00 per hour		14.00
Manufacturing overhead (1?6 variable)	1.4 hours	$	12.00 per hour		16.80
Total standard cost per jacket				$	40.00

The following additional information relating to the new jacket is available:
a.	The only variable selling and administrative cost will be $4 per jacket for shipping. Fixed selling and administrative costs will be (per year):

Salaries	$	90,000
Advertising and other		384,000
Total	$	474,000

b.	Because the company manufactures many products, no more than 21,000 direct labor-hours per year can be devoted to production of the new jackets.

c.	An investment of $900,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment. The company