i$.$ Determine the contribution margin per unit and the contribution margin per machine hour

for each of the two sizes of stuffed animal toys.

ii$.$ Determine which size of stuffed animal toys is more profitable to produce under constrained

capacity. How many units of each size should Comfy Toy Company produce under the

current capacity $($i$.$e$.,3,000$ machine hours$)?$ Justify your answers with supporting

calculations.

$4$

iii. Due to an unexpected high demand for stuffed dinosaur toys, the discount store chain has

requested an additional order of $5,000$ large stuffed dinosaur toys and is willing to pay $$37$

per dinosaur toy for this special order. Determine the opportunity cost associated with this

special order.

iv$.$ Should Comfy Toy Company accept the special order described in $($iii$)?$ Explain your

answer with supportive calculations.

v$.$ Suppose the company has the option to subcontract the production of up to $10,000$ small

stuffed animal toys to an external supplier at a cost of $$22$ per animal toy. Determine the

optimal distribution of units for each size of toys $($including special$-$order units, small, and

large toy units$)$ that should be produced in$-$house and subcontracted.

vi$.$ Evaluate the viability of subcontracting the production for the company based on the

calculations provided in $($v$).$ Provide an explanation supported by relevant calculations.

vii. Recommend a suitable price for the subcontracted production, justifying your choice with

calculations.

viii. Provide three qualitative factors you would advise the company to take into consideration

for the subcontracted production.