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Homework o Saved Help Save & Chi Franklin Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive
Homework o Saved Help Save & Chi Franklin Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 35,000 and 71,000 units per year. $ 429,000 Book erences Revenue (39,000 units x $11.00) Unit-level variable costs Materials cost (39,000 * $3.00) Labor cost (39,000 * $2.00) Manufacturing overhead (39,000 * $0.10) ng overhead (39,000 * SA 10 Shipping and handling (39,000 x $0.32) Sales commissions (39,000 * $2.00) Contribution margin Fixed expenses Advertising costs Salary of production supervisor Allocated company-wide facility-level expenses Net loss (117,000) (78,000) (3,900) (12,480) (78,000) (27,000) (67,000) (80, 000) S (34,380) Required a. A large discount store has approached the owner of Franklin about buying 7000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Franklin's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.50 per calculator Calculate the TWOIN Help Save & Che Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 Required C Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination increase or decrease profitability? (Negative amounts should be indicated by a minus sign.) Contribution to profit (loss) Should it be eliminated from the company's operations? No Required B3
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