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The Houston Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: B (Click the icon to view the department information.) Each cabinet sells for $115 and has direct material costs of $90 incurred at the start of the machining operation. Houston has no other variable costs. Houston can sell whatever output it produces. The following requirements refer only to the preceding data. There is no connection between the requirements. Read the requirements. re Requirement 1. Houston is considering using some modern jigs and tools in the finishing operation that would increase ar these tools? Show your calculations. - X Data Table Producing 1,450 more units will generate more contribution (throughput) margin and operating income because finishing is a bottleneck operation; machining is not Select the formula, then enter the amounts to calculate the change in throughput contribution. Machining 170,000 units Finishing 145,000 units Change in throughput 145,000 units 145,000 units Throughput contribution per unit Relevant units Annual capacity Annual production Fixed operating costs (excluding direct materials) Fixed operating costs per unit produced ($1,160,000 + 145,000; $870,000 - 145,000) = contribution $1,160,000 $870,000 1,450 = $8 per unit $6 per unit Should Houston acquire these tools? The the incremental costs in throughput contribution margin is implement the new design. Therefore, Houston Print Done Requirement 2. The production manager of the Machining Department has submitted a proposal to do faster setups that year. Should Houston implement the change? Show your calculations. Increasing its capacity further increase contribution (throughput) margin. Houston implement the change to increase production. Choose from any list or enter any number in the input fields and then continue to the next question. Requirement 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 11,000 units and would cost $26,000 per year. Should Houston implement the change? Show your calculations. Increasing its capacity further increase contribution (throughput) margin. Houston implement the change to increase production. Requirement 3. An outside contractor offers to do the finishing operation for 12,000 units at $18 per unit, triple the $6 per unit that it costs Houston to do the finishing in-house. Should Houston accept the subcontractor's offer? Show your calculations. Select the formula you will use to calculate the change in throughput contribution. Then, enter the amounts in the formula and calculate the change in throughput contribution. Change in throughput X contribution Houston contract with an outside contractor to do 12,000 units of finishing at $18 per unit because the in throughput contribution is incremental costs by Requirement 4. The Halland Corporation offers to machine 6,600 units at $4 per unit, half the $8 per unit that it costs Houston to do the machining in-house. Should Houston accept Halland's offer? Show your calculations. Operating costs in the Machining Department of $1,160,000, or $8 per unit, are costs. Houston Requirement 4. The Halland Corporation offers to machine 6,600 units at $4 per unit, half the $8 per unit that it costs Houston to do the machining in-house. Should Houston accept Halland's offer? Show your calculations. Operating costs in the Machining Department of $1,160,000, or $8 per unit, are costs. Houston save any of these costs by subcontracting machining 6,600 units to Halland. Total costs will be greater by Houston accept Halland's order. Requirement 5. Houston produces 1,400 defective units at the machining operation. What is the cost to Houston of the defective items produced? Explain your answer briefly. The cost of 1,400 defective units at the machining operation is produce and transfer the annual Because the Machining Department has a capacity of 170,000 units, it production to the Finishing Department. Therefore, there Machining Department. opportunity cost of producing defective units in the Requirement 6. Houston produces 1,400 defective units at the finishing operation. What is the cost to Houston of the defective items produced? Explain your answer briefly. The cost of 1,400 defective units in the Finishing Department is Because the Finishing Department a bottleneck operation, the cost of a defective unit is because of the of contribution margin. Choose from any list or enter any number in the input fields and then continue to the next