Starship Inc. is in the process of measuring its financial performance. They are interested in the

performance of the three divisions. From information collected, below are their financial results:

Divisions

Canada USA Europe

Sales $330,200 $477,500 $653,345

Operating income 55,045 97,482 1 24,445

Average investment 99,000 290,000 176,000

Required:

A. Assume Relic has sufficient excess capacity to produce Balboa's order. Calculate

the potential total contribution if the special order is accepted.

B. Assume Relic is operating at full capacity. Calculate the contribution margin per

unit and per machine hour. Should Relic produce the units for Balboa's special

order instead of wager or gripper.

C. What if Relic is operating at 95% of full capacity. What would be the opportunity

cost would if Balboa's special order is accepted.

D. If Relic is actually operating at 95% of full capacity but they have opportunity to

rent additional machines for $35,000 to produce Balboa's special order. Calculate

its effect on Relic's profit If they accept the special order.

E. What advice would you provide to Relic's stakeholders whether they have

capacity or not about taking the special order?