Rooney Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 33,000 and 73,000 units per year. Required a. A large discount store has approached the owner of Rooney about buying 8,000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Rooney's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.40 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Rooney accept the special order? b-1. Rooney has an opportunity to buy the 36,000 calculators it currently makes from a reliable competing manufacturer for $4.50 each. The product meets Rooney's quality standards. Rooney could continue to use its own logo, advertising program, and sales force to distribute the products. Calculate the total cost for Rooney to make and buy the 36,000 calculators. b-2. Should Rooney buy the calculators or continue to make them? b-3. Should Rooney buy the calculators or continue to make them, if the volume of sales were increased to 73,000 units? c. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination increase or decrease profitability? Complete this question by entering your answers in the tabs below. Rooney has an opportunity to buy the 36,000 calculators it currently makes from a reliable competing manufacturer for $4.50 each. The product meets Rooney's quality standards. Rooney could continue to use its own logo, advertising program, and sales force to distribute the products. Calculate the total cost for Rooney to make and buy the 36,000 calculators. Complete this question by entering your answers in the tabs below. Should Rooney buy the calculators or continue to make them? Should Rooney buy the calculators or continue to make? Complete this question by entering your answers in the tabs below. Should Rooney buy the calculators or continue to make them, if the volume of sales were increased to 73,000 units? Should Rooney buy the calculators or continue to make? Complete this question by entering your answers in the tabs below. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination increase or decrease profitability? Note: Negative amount should be indicated by a minus sign
