- My question is in 3 parts as below:
Question4: ( 10 Points ) A)- Linehan Company has three departments. Data for the most recent year is presented below: C A I Sales $4,000 $1,920 $2,240 Variable expenses 3,280 1,420 520 Fixed expenses: Unavoidable 480 180 140 Avoidable 555 265 360 Operating income (loss) (315) 55 20 Linehan Company is considering eliminating department C because it has a loss. Required: Required: a. Compute the change in operating income if Linehan Company eliminates Department C and does not replace it. b. Compute the change in operating income if Linehan Company replaces Department C with a second Department T. This will double the sales of Department T without increasing fixed cost. B)- Glunn Company makes three products in a single facility. These products have the following unit product costs: Product A B C Direct materials.... $12.80 $ 9.30 $ 4.70 Direct labor ........ 14.10 14.90 10.00 Variable manufacturing overhead....... 1.20 0.90 0.50 Fixed manufacturing overhead ........... 18.50 17.20 23.70 Unit product cost.... $46.60 $42.30 $38.90 Additional data concerning these products are listed below. Product A B C Mixing minutes per unit 3.70 3.40 3.90 Selling price per unit ..............". $59.20 $60.10 $55.30 Variable selling cost per unit ..... $2.90 $2.70 $3.70 Monthly demand in units ..... ..... 2,000 4,000 2,000 The mixing machines are potentially the constraint in the production facility. A total of 24,200 minutes are available per month on these machines. Direct labor is a variable cost in this company. Required: a. How many minutes of mixing machine time would be required to satisfy demand for all three products? b. How much of each product should be produced to maximize net operating income? (Round off to the nearest whole unit.) c. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity? (Round off to the nearest whole cent.)