Luke Corporation produces a variety of products, each within their own division. Last year, the managers at Luke developed and began marketing a new chewing gum, Bubbs, to sell in vending machines. The product, which sells for $$6\mathrm{.}05$ per case, has not had the market success that managers expected, and the company is considering dropping Bubbs.Required:

a$.$ Bunk Stores has requested a quote for a special order of Bubbs. This order would not be subject to any corporate allocation $[$arid

would not affect corporate costs$).$ What is the minimum price Mr$.$ Anore can offer Bunk without reducing profit ary further?

b$.$ How many cases of Bubbs does Luke have to sell in order to break even on the product?

c$.$ Suppose Luke has a requirement that all procucts heve to earn $5$ percent of seles $($after tax and corporate allocations$)$ or they wil

be dropped. How meny cascs of Bubbs does Mr$.$ Andre need to sell to avoid seeing Bubbs dropped?

d$.$ Assume all costs and prices will be the same in the next year. If Luke drops Bubas, how much will Luke's protits increase or

decresse? Assume thet flxed production costs can be avoided if Bubbs is dropped.