Frannie Fans currently manufactures ceiling fans that include remotes to operate them. Frannie is approached by Lincoln Company which offers to make the remotes for $18 per unit. Required:

1. Compute the difference in cost between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income?

2. Compute the difference in cost between making and buying the remotes if $20,520 of the fixed costs can be avoided. What is the change in net income?

3. What is the change in net income if fixed cost of $20,520 can be avoided and Frannie could rent out the factory space no longer in use for $20,520?

1 Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows: Table A Table B Table c Sales price 45 49 63 4 Direct materials 8 9 10 points Direct labor 1 3 7 Variable manufacturing overhead Fixed manufacturing overhead 3 3 3 4 4 4 Required number of labor hours Required number of machine hours 0.50 0.50 1.00 ook 4.00 2.50 2.00 Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows: Print References 50,000 units 30,000 units 20,000 units Table A Table B Table c Required: 1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3 2. If Blossom has only 45,000 direct labor hours available, calculate the number of units of each table that Blossom should produce to maximize its profit. 3. Suppose that the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3. 4. If Blossom has only 237,000 machine hours available, calculate the number of units of each table that Blossom should produce to maximize its profit