Munoz Corporation makes and sells state$-$of$-$the$-$art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The$-$relevant range for the production and sale of the calculators is between $38,000$ and $72,000$ units per year.$$312,000(78,000)(39,000)(7,800)(10,140)(39,000)138,060(28,000)(68,000)(81,000)$$$(38,940)$

Required

a$.$ A large discount store has approached the owner of Munoz about buying $6,000$ calculators. It would replace The Math Machine's label with its own logo to avoid affecting Munoz's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $$5\mathrm{.}10$ per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Munoz accept the special older?

b$-1.$ Munoz has an opportunity to buy the $38,000$ calculators it currently makes from a reliable competing manufacturer for $$4\mathrm{.}80$ each. The product meets Munoz's quality standards. Munoz could continue to use its own logo$,$ advertising program, and sales force to distribute the products. Calculate the total cost for Munoz to make$-$and buy the $38,000$ calculators.

b$-2.$ Should Munoz buy the calculators or continue to make them?

b$-3.$ Should Munoz buy the calculators or continue to make them, if the volume of sales were increased to $72,000$ units?

c$.$ Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination increase or decrease profitability?

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