Stuart 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.

Requlred

a$.$ A large discount store has approached the owner of Stuart about buying $4,000$ calculators. It would replace The Math Machine's label with its own logo to avoid affecting Stuart'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\mathrm{.}30$ per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Stuart accept the special order?

b$-1.$ Stuart has an opportunity to buy the $35,000$ calculators it currently makes from a reliable competing manufacturer for $$4\mathrm{.}70$ each. The product meets Stuart's quality standards. Stuart could continue to use its own logo$,$ advertising program, and sales force to distribute the products. Calculate the total cost for Stuart to make and buy the $35\mathrm{.}000$ calculators.

b$-2.$ Should Stuart buy the calculators or continue to make them?

b$-3.$ Should Stuart buy the calculators or continue to make them, if the volume of sales were increased to $73\mathrm{.}000$ 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?

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Req A

Req B$1$

Req B$2$

Req B$3$

Req C

A large discount store has approached the owner of Stuart about buying $4,000$ calculators. It would replace The Math Machine's label with its ovin logo to avoid affecting Stuart'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\mathrm{.}30$ per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Stuart acc the special order?

Note: Negative amount should be indicated by a minus sign.

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Contribution margin $($loss$)$

Should Stuart accept the special order?