Please provide answers with clear explanations:

Q1. Raman Corp. has made 18,000 units of part E44 for the last several years. This part is used in one of the company's printers.

The company's accounting department reports the following costs of producing the part at 18,000 units of activity:

Per Unit

Direct materials$2.50

Direct labor$5.00

Variable overhead$1.75

Supervisor salary$7.50

Machine depreciation$6.00

Going forward, the company believes it will need 20,000 units of part E44 each period.An outside supplier has offered to sell the part to the company, with "free" shipping!If the part is outsourced, the supervisor's salary and all of the variable costs can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. In addition, the space currently used to produce Part E44would be repurposed tomake more of another product, generating an additional segment margin of $40,000 per year.

What is the maximum price per unit that Raman should pay to purchase Part E44 fromthe supplier?

Q2. Bowser, Inc. is considering using its existing stock of plutonium for a special order from Arbor, Corp.The special order would require all 120 pounds of plutonium that Bowser possesses.This material originally cost Bowser $816,000 in 2015.If Bowser were to buy new plutonium on the open market, it would cost $7,250 per pound.Bowser now has no other use for this plutonium and, if it were not used in the special order, Bowser would sell all the plutonium at a discounted price of $6,500 per pound to a foreign country.Such a sale would involve delivery to the foreign country at a cost of $8,000.

In order to go forward with the special order from Arbor, what is the minimum price Bowser should accept?

Q3. A farmer grows peanuts. It costs him $5,000 to plant and harvest the peanuts. He can sell them for $10,000. Instead of selling them, he could process the peanuts into peanut butter in his basement workshop. This costs an extra $2,000 in labor and $1,000 for the jars. He'll be able to sell the peanut butter for $18,000.

How much better off is the farmer if he processes the peanuts into peanut butter?

Q4. The following information relates to Questions 4 & 5:

Ohio Chemical(Ohio) manufacutures a variety of household products. A key ingredient in Ohio's products is mytron, which typically costs $1 per ounce. Because of a recent shortage of mytron, Ohio's management must decide how to most effectively ration its available supply.

Information related to the three products that use mytron are shown below:

Hand SoapPaint RemoverLaundry Detergent

Contribution margin per case $24$20$12

Contribution margin ratio 50%40%60%

Mytron required per case (in ounces) 352

Maximum monthly demand (in cases) 5002002,000

Assume that Ohio hasonly 4,000 ounces of mytron available next month.

What is the maximum amount of contribution margin that Ohio can generate from the three products?

Q5. The following information relates to Questions 4 & 5:

Ohio Chemical (Ohio) manufacutures a variety of household products. A key ingredient in Ohio's products is mytron, which typically costs $1 per ounce. Because of a recent shortage of mytron, Ohio's management must decide how to most effectively ration its available supply.

Information related to the three products that use mytron are shown below:

Hand SoapPaint RemoverLaundry Detergent

Contribution margin per case $24$20$12

Contribution margin ratio 50%40%60%

Mytron required per case (in ounces) 352

Maximum monthly demand (in cases) 5002002,000

Assume that Ohio has only 4,000 ounces of mytron available next month.

What is the maximum total price that Ohio should pay for the additional mytron necessary to complete production?