Gormley Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: A6, a regular cutting must be manufactured on both the regular machine and a high-precision machine. The following information is available: EB (Click to view the information.) Read the requirements. tool, and EX4, a high-precision cutting tool. A6 is manufactured on a regular machine, but E Requirement 1. What product mix-that is, how many units of A 6 and EX4-will maximize Gormley's operating income? Show your calculations. Enter an amount in each input cel icluding zero balances Begin by calculating the benefit from only selling A6 or EX4 A6 EX4 Contribution margin per unit 50000 2500000 700000 1800000 30 50000 30000001 100000 1900000 Hours of constrained resource Total contribution margin Less: Fixed costs Net relevant benefit Gormley should use its capacity to produce EX4 since the net relevant benefit is higher .The additional contribution from selling EX4 rather than A6 is to cover the additional costs of leasing the high-precision machine. Requirement 2. Suppose Gormley can increase the annual capacity of its regular machines by 15,000 machine-hours at a cost of $300,000. Should Gormiey increase the capacity of the regular machines by 15,0C machine hours? By how much will Gormley's operating income increase or decrease? Show your calculations. Begin by calculating the benefit from only selling A6 or EX4 with the increased capacity of the regular machine. (Enter an amount in each input cell including zero balances.) hoose from any list or enter any number in the input fields and then continue to the next question. Gomley Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: A6, a regular cutting must be manufactured on both the regular machine and a high-precision machine. The following information is EEB Click to view the information.) Read the requirements Requirement 2. Suppose Gorml tool, and EX4, a high-precision cutting tool. AB is manufactured on a regular machine, but EX4 ey can increase the annual capacity of its regular machines by 15,000 machine-hours at a cost of $300,000. Should e or decrease? Show your calculations Gormley increase the capacity of the reguiar machines machine hours? By how much will Gormley's operating income increas Begin by calculating the benefit from only selling A6 or EX4 with the increased capacity of the regular machine. (Enter an amount in each input cell including zero balances.) A6 EX4 Contribution margin per unit 50 30 Hours of constrained resource 15000 15000 750000 450000 IL Total contribution margin Less: Cost of increasing capacity 300000 300000 Net relevant benefit 450000 150000 Should Gormley increase the capacity of the regular machines by 15,000 machine hours? By how much will Gormley's operating income increase? Gormley should increase the capacity of the regular machine by 15,000 machine hours. Gormiey's operating income will increase by $ 450000 Choose from any list or enter any number in the input fields and then continue to the next question. Gormley Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: must be manufactured on both the regular A6, a regular cutting tool, and EX4, a high-precision cutting tool. A8 is manufactured on a regular machine, but EX4 machine and a high-precision machine. The following information is available: (Click to view the information.) Read the requirements Requirement 3. Suppose that the capacity of the regular machines has been 65,000 hours. regular machine, and variable marketing cost equals $20 per unit) What product mix should Gormley choose to maximize operating income? Show your calculations. First, determine the amount that should be used to determine if Gormley should accept Clark's order. increased to 65,000 hours. Gormley has been approached by Clark Corporation to supply 20,000 units of another cutting tool, V2, for $240 units or reject it totally. V2 is exactly like A6 except that its variable manufacturing cost is $130 per unit. (It takes one hour to produce one unit of V2 on the A6 EX4 V2 Contribution margin per unit Gormley Next, determine the product mix for A6 and EX4 that will maximize operating income along with the decision you made about Clark's order. (Enter an amount in each input cell including zero balances) 50 30 90 accept Clark's order A6 EX4 Contribution margin per unit x Hours of constrained resource Total contribution margin Less: 65000 65000 Nat ralerant hanofit hoose from any list or enter any number in the input fields and then continue to the next question. nts. .901 per unit 50 30 accept Clark's order. product mix for A6 and EX4 that will maximize operating income along with the decision you made abo A6 EX4 per unit strained resource argin 50 30 65000 6500 ould Gormley choose to maximize operating income? (Enter an amount in each input cell, including z calculations, the product mix that maximizes operating income is 20000 units of V2. 900001 units of EX4. t or enter any number in the input fields and then continue to the next