Lang Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The companys chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segments operating activities. The relevant range for the production and sale of the calculators is between 31,000 and 65,000 units per year.

Revenue (41,000 units $9)	$	369,000
Unit-level variable costs
Materials cost (41,000 $3)		(123,000	)
Labor cost (41,000 $1)		(41,000	)
Manufacturing overhead (41,000 $0.60)		(24,600	)
Shipping and handling (41,000 $0.26)		(10,660	)
Sales commissions (41,000 $1)		(41,000	)
Contribution margin		128,740
Fixed expenses
Advertising costs		(21,000	)
Salary of production supervisor		(61,000	)
Allocated companywide facility-level expenses		(81,000	)
Net loss	$	(34,260	)

1.Lang has an opportunity to buy the 41,000 calculators it currently makes from a reliable competing manufacturer for $5.80 each. The product meets Langs quality standards. Lang could continue to use its own logo, advertising program, and sales force to distribute the products. Should Lang buy the calculators or continue to make them?

Make or buy?

2.Calculate the total cost for Lang to make and buy the 41,000 calculators.

total cost make buy

3. Should Lang buy the calculators or continue to make them, if the volume of sales were increased to 65,000 units?

Make or buy

4Calculate the contribution to profit from operating the calculator division. (Negative amount should be indicated by a minus sign.)

5. Should it be eliminated from the companys operations?