Team Activity-Chapter 7 1. Scheider, Inc., produces a single product. The costs of producing and selling a single unit of this product at the company's current activity level of 8,000 units per month are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and admin. expenses Fixed selling and admin. expenses $2.50 $3.00 $0.50 $4.25 $1.50 $2.00 The normal selling price is $15 per unit. The company's capacity is 10,000 units per month. An order has been received from a potential customer overseas for 2,000 units at a price of $12 per unit. This order would not affect regular sales nor company's total fixed costs. If the order is accepted, by how much will monthly profits increase or decrease? Il. Howey's Home Center, a retailing company, has two departments, Bath and Kitchen. The company's most recent monthly contribution format income statement follows: Sales revenue Variable costs Contribution margin Fixed expenses Net operating income (loss) Bath $1,000,000 300,000 700,000 900,000 $(200,000) Kitchen $4,000,000 1,600,000 2,400,000 1,800,000 $600,000 Total $5,000,000 1,900,000 3,100,000 2,700,000 $400,000 A study indicates that $370,000 of the fixed expenses being charged to the Bath Department are sunk costs or allocated costs that will continue even if the Bath Department is dropped. If the Bath Department is dropped, what will be the effect on the net operating income of the company as a whole