K corp. manufacturers two products: tablets and smartphones.

production and sales (in units) 1,000 8,000

inspection hours per unit .80 .20

selling price per unit. $400 $200

variable cost per unit $75 $40

traceable fixed costs $30,000 $280,000

1. compute the most kurimay should be willing to pay to increase inspection capacity by 100 hours. note the sales mix doesn't need to remain the same

2. assume that k corp is considering a change to its sales mix. it will produce 100 fewer tablets each month and use that freed up inspection hours to produce phones. compute the change in corporate monthly profit that will result if it makes this change.

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