luke corporation produces a variety of products, each within their own division.

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 $5.55 per case, has not had the market success that managers expected and the company is considering dropping Bubbs. The product-line income statement for the past 12 months follows: $ 14,691,150 Revenue Conts Manufacturing costs Allocated corporate costs (58) Product-line margin Allowance for tax (208) Product-line profit (loss) $ 14,443,395 734,558 $ 15,177,953 (486, 803) 97,360 (389,443) All products at Luke receive an allocation of corporate overhead costs, which is computed as 5 percent of product revenue. The 5 percent rate is computed based on the most recent year's corporate cost as a percentage of revenue. Data on corporate costs and revenues for the past tw years follow: Most recent year Previous year Corporate Revenue Corporate Overhead Costs $ 112,750,000 $ 5,637,500 76,800,000 4,875,360 Roy O. Andre, the product manager for Bubbs, is concerned about whether the product will be dropped by the company and has employed you as a financial consultant to help with some analysis. In addition to the information given, Mr. Andre provides you with the following data on product costs for Bubbs: i u Jo Lipiuyu yuuuu L following data on product costs for Bubbs: Month Cases 213,000 220,200 217,900 234.000 249,900 243,000 223,200 250,200 241,800 255,600 253,200 262,200 Production Costs $1,150,828 1, 172, 328 1.180,981 1,196,523 1,198,827 1,219,673 1,194,699 1,237,774 1.236.226 1,248.325 1,252,760 1,283,451 10 11 12 Required: a. Bunk Stores has requested a quote for a special order of Bubbs. This order would not be subject to any corporate allocation (and would not affect corporate costs). What is the minimum price Mr. Andre can offer Bunk without reducing profit any 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 products have to earn 5 percent of sales (after tax and corporate allocations) or they will be dropped. How many cases 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 Bubbs, how much will Luke's profits increase or decrease? Assume that fixed production costs can be avoided if Bubbs is dropped. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required: a. Bunk Stores has requested a quote for a special order of Bubbs. This order would not affect corporate costs). What is the minimum price Mr. Andre can offe b. How many cases of Bubbs does Luke have to sell in order to break even on c. Suppose Luke has a requirement that all products have to earn 5 percent of dropped. How many cases of Bubbs does Mr. Andre need to sell to avoid seein d. Assume all costs and prices will be the same in the next year. If Luke drops B decrease? Assume that fixed production costs can be avoided if Bubbs is drop Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Bunk Stores has requested a quote for a special order of Bubbs. This order would (and would not affect corporate costs). What is the minimum price Mr. Andre can further? (Round your answer to 2 decimal places.(i.e., 32.21)) Minimum price per case Required: a. Bunk Stores has requested a quote for a special order of Bubbs. This order wou would not affect corporate costs). What is the minimum price Mr. Andre can offer B b. How many cases of Bubbs does Luke have to sell in order to break even on the c. Suppose Luke has a requirement that all products have to earn 5 percent of sale dropped. How many cases of Bubbs does Mr. Andre need to sell to avoid seeing B d. Assume all costs and prices will be the same in the next year. If Luke drops Bubb decrease? Assume that fixed production costs can be avoided if Bubbs is dropped. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D How many cases of Bubbs does Luke have to sell in order to break even on the produc decimal places, fixed costs to whole dollar amount and profit per case to 3 decimal pla your final answer up to the nearest whole unit.) Number of cases Required: a. Bunk Stores has requested a quote for a special order of Bubbs. Thi would not affect corporate costs). What is the minimum price Mr. Andre b. How many cases of Bubbs does Luke have to sell in order to break c. Suppose Luke has a requirement that all products have to earn 5 pe dropped. How many cases of Bubbs does Mr. Andre need to sell to ave d. Assume all costs and prices will be the same in the next year. If Luke decrease? Assume that fixed production costs can be avoided if Bubbs Complete this question by entering your answers in the tabs bela Required A Required B Required C Required D Suppose Luke has a requirement that all products have to earn 5 percent will be dropped. How many cases of Bubbs does Mr. Andre need to sell to price per case to 2 decimal places and do not round your other intermedia nearest whole unit.) Number of cases