PLEASE SOLVE PB7-4 (last photo)

PB7-2 Analyzing Make-or-Buy Decision OLO 7-2, 7-4 Greenview Corp. (see PB7-1) is considering the possibility of outsourcing the production of the upholstered chair pads included with some of its wooden chairs. The company has received a bid from a company in China to produce 1,000 units per year for $9 each. Greenview has the following information about its own production of the chair pads: Direct materials Direct labor Variable manufacturing overhead 2 Fixed manufacturing overhead Total cost per unit $10 Greenview has determined that all variable costs could be eliminated by dropping production of the chair pads, and that 30 percent of the fixed manufacturing overhead is avoidable. At this time, Greenview has no specific use in mind for the space cprrently dedicated to producing the chair pads PB7-3 Analyzing Keep-or-Drop Decision LO 7-2, 7-5 Greenview Corp. (see PB7-1 and PB7-2) is considering eliminating a product from its line of outdoor tables. Two products, the Sunrise and Noche tables, have impressive sales. However, sales for the Blanco model have been dismal. Information related to Greenview's outdoor table line is as follows. Page 343 Segmented Income Statement for Greenview's Outdoor Table Products Sunrise Noche Blanco Total Sales revenue $110,000 $77,000 $33,000 $220,000 Variable costs Contribution margin Less: Direct fixed costs 77,000 52,000 25,500 154,500 $ 33,000 $25,000 $ 7,500 $ 65,500 3,200 2,400 3,000 8,600 $ 29,800 $22,600 $ 4,500 $ 56,900 16,800 11.760 5,040 33,600 $ 13,000 $10,840 $ (540) $ 23,300 Segment margin Common fixed costs Net operating income (loss) *Allocated based on total sale revenue Greenview has determined that eliminating the Blanco model will cause sales of the Sunrise and Noche tables to increase by 10 percent and 5 percent, respectively. Variable costs for these two models will increase proportionately. Direct fixed costs are avoidable, but common fixed costs will remain unchanged. PB7-4 Analyzing Sell-or-Process-Further Decision CLO 7-2, 7-6 Greenview (see PB7-1 to CPB7-3) currently manufactures one model of a plain, unfinished oak bookcase. The company is considering changing this product by adding a long-wearing finish and more appealing trim. A summary of the expected costs and revenues for Greenview's two options follows: Unfinished Bookcase Finished Bookcase Estimated demand 8,000 units 8,000 units Estimated sales price $50.00 $80.00 Estimated cost per unit Direct materials $11.00 $15.00 Direct labor 8.00 20.00 Variable manufacturing overhead 0.50 1.50 Fixed manufacturing overhead 5.00 5.00 Unit manufacturing cost $24.50 $41.50 Additional implementation cost $75,000 Required: 1. Compute the difference in profit between selling the bookcases finished or unfinished. 2. Should Greenview finish the bookcases? 3. Suppose that choosing to process the bookcases further would reduce the number of units sold to 6,500. Repeat requirements 1 and 2 under this new scenario