Name on Request Company produces a single product called Thing. The company normally produces and sells 50,000 Things each year at a selling price of $50 per unit, The company's unit costs and total costs at this level is given below:

Direct Materials	Unit Cost $15	Total Cost $750,000
Direct Labor	8	400,000
Variable Manufacturing Overhead	3	150,000
Fixed Manufacturing Overhead	9	450,000
Variable Selling Expenses	4	200,000
Fixed Selling Expenses	6	300,000
Cost per Unit and Total Cost	$45	$2,250,000

Answer the SIX questions below relating to the production and sale of Things. NOTE: Each question is INDEPENDENT.

1. Assume Name on Request Company has enough capacity to produce 75,000 Things per year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 30 %above the present 50,000 units each year if it is willing to increase its advertising expense by $80,000. Would the increased expense be justified? (Show your calculation),

2. Due to a reduction in demand, Name on Request Company expects to sell only 40,000 Things to their retail outlets next year. A large discount chain has offered to purchase 10,000 Things if Name on Request is willing to accept a 16% discount off the regular price. There would be no sales commission on this order, thus variable expense would only be $1 per unit. Unfortunately Name on Request would need to purchase a custom made press to stamp the discount chain's name on the 10,000 Things. The press would cost $10,000. There is no assurance that the discount chain will purchase additional Things in the future. Determine the impact on profits next year if the special order is accepted. (Show your calculation),

3. Assume that Name on Request Company has sufficient capacity to produce 75,000 Things each year. A company in Somalia wants to purchase 10,000 Things. Import Duties on the Things would be $2 per Thing and an annual permit costing $12,000. The only selling cost that would be associated with the order would be a $3 per Thing shipping cost. Compute per unit break-even price on this order. (Show your calculation),

4. The company has 1,847 Things on hand that have some irregularities and are therefore considered to be "seconds". Due to the irregularities, it will be impossible to sell the Things at th normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum selling price? Also, explain your reasoning.

5. Due to a fire at its supplier's plant, Name on Request Company is not able to purchase more material for the production of Things. The supplier expects repairs to be completed in three months. Name on Request has enough material on hand to operateat 40% of normal levels for the three month period. As an alternative, Name on Request could close its plant down entirely for the three months. If the plant were closed, fixed manufacturing overhead costs would continue at 60 % of their normal level during the three month period, and fixed selling expense would be reduced by 20 %. What would be the impact on profits of closing the plant for the three month period? (Show your calculation),

6. An outside manufacturer has offered to produce Things and ship them directly to Name on Request Company's customers. If Name on Request accepts this offer, the plant that it uses to produce Things would be idle. However, fixed manufacturing overhead costs would be reduced by 75 %. Because the outside manufacturer would pay for all shipping costs, variable selling expenses would be only $1 per Thing. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer. (Show your calculation),