Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow: Total Cups Pitchers Sales revenue $460,000 $310,000 $150,000 Variable expenses 355.000 235,000 [120,000 Contribution margin 105,000 75,000 30,000 Fixed expenses 76,000 38,000 38.000 Operating income $29,000 $37.000 $(8.000) Kloss) If $25,922 in fixed costs will be eliminated by dropping the Pitcher line, how will operating income be affected? If income drops, use a negative sign in front of the number. You Answered 17.922 Correct Answer -4,078 margin of error +/- 1 Clear Sky Sailmakers manufactures sails for sailboats. The company has the capacity to produce 15,000 sails per year, but is currently producing and selling 10,000 sails per year. The following information relates to current production: Sale price per unit $250 Variable costs per unit: Manufacturing $153 Marketing and administrative $37 Fixed Cost per Unit Manufacturing $75 Marketing and administrative $20 If a special sales order is accepted for 4,820 sails at a price of $226 per unit, and fixed costs remain unchanged, how would operating income be affected? (assume regular sales are not affected by the special order) If accepting the special order would reduce income, use a negative number for your answer. You Answered -634,380 Correct Answer 173,520 margin of error +/- 10 072 pts Question 15 Spahr Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 5,000 units, is shown in the table below. Erickson Company has offered to sell 5,000 units of the same part to Spahr Company for $11 per unit. Assuming the company has no other use for its facilities, what should Spahr Company do? Direct materials $2.00 Direct labor $4.00 Variable manufacturing overhead $2.00 Fixed manufacturing overhead $4.00 Total cost $12.00 The fixed overhead costs are unavoidable. Make the part and save $7 per unit. You Answered Make the part and save $2 per unit Correct Answer Make the part and save $3 per unit Buy from Erickson and save $1 per unit