Managerial Accounting - Answer the following questions

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4. Omar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow. Units Sales revenue Less: Cost of goods sold Gross Margin Less: Selling expenses Operating income (loss) Regular 10,000 $280,000 210,000 $ 70,000 70,000 $ 0 Super 4,000 $760,000 400,000 $360,000 220,000 $140,000 Total 14,000 $1,040,000 610,000 $ 430,000 290,000 $ 140,000 Fixed manufacturing costs included in cost of goods sold amount to $2 per unit for Regular and $20 per unit for Super. Variable selling expenses are $3 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed. Omar Industries wants to drop the Regular product line. If the line is dropped, company-wide fixed manufacturing costs would fall by 10% because there is no alternative use of the facilities. What would be the impact on operating income if Regular is discontinued? Please show your computation steps. 5. Ooo-La-La Company has met all production requirements for the current month and has an opportunity to manufacture additional units with its excess capacity. Unit selling prices and unit costs for three product lines follow. Plain Regular Super Selling price $105 $120 5130 Direct material 25 29 35 Direct labor (at $25 per hour) 15 20 15 Variable overhead 21 25 29 Fixed overhead 19 20 21 Variable overhead is applied on the basis of direct labor dollars, whereas fixed overhead is applied on the basis of machine hours. There is sufficient demand for the additional manufacture of all products. Required: A. If Ooo-La-La has excess machine capacity and can add more labor as needed (i.e., neither machine capacity nor labor is a constraint), which product is the most attractive to produce? B. If Ooo-La-La has excess machine capacity but a limited amount of labor time available, which product or products should be manufactured in the excess capacity