Question 1:

Vinyl 'R' Us sells its main product, vinyl records, at a price of $45 per unit. The cost per unit for the records are as follows:

Direct Materials: $9

Direct Labor: $15

Variable factory overhead: $5

Fixed factory overhead: $7

Total Cost: $36

Assume that the company has excess capacity. The company has received an order for 30,000 units for $35. The buyer wants their records to be colored blue. The dye to color the records costs $3 per unit. Should the company accept the offer?

Question 2:

Paloma Industries budgets sales of grapefruit soda at 300,000 units for December. Production of one unit of grapefruit soda requires ¹/₂ oz. of aluminum. Actual beginning inventories and budgeted ending inventories for the month are as follows:

	December 1	December 31
Grapefruit Soda	15,000 units	4,000 units
Aluminum	22,000 oz.	30,000 oz.

Compute the number of oz. of aluminum that the company needs to purchase during the month of December.