The Charlotte Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: (Click the icon to view the department information.) Each cabinet sells for $95 and has direct material costs of $55 incurred at the start of the machining operation. Charlotte has no other variable costs. Charlotte can sell whatever output it produces. The following requirements refer only to the preceding data. There is no connection between the requirements. Read the requirements. ===== Requirement 1. Charlotte is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,250 units. The annual cost of these jigs and tools is $40,000. Should Charlotte acquire these tools? Show your calculations Producing 1,250 more units will generate contribution (throughput) margin and operating income because Requirements Data table Annual capacity Annual production Fixed operating costs (excluding direct materials) Fixed operating costs per unit produced ($1,050,000 - 105,000; $630,000 = 105,000) Machining Finishing 130,000 units 105,000 units 105,000 units 105,000 units $1,050,000 $630,000 1. Charlotte is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,250 units. The annual cost of these jigs and tools is $40,000. Should Charlotte acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 12,000 units and would cost $28,000 per year. Should Charlotte implement the change? Show your calculations. 3. An outside contractor offers to do the finishing operation for 16,000 units at $18 per unit, triple the $6 per unit that it costs Charlotte to do the finishing in-house. Should Charlotte accept the subcontractor's offer? Show your calculations. 4. The Henry Corporation offers to machine 6,400 units at $5 per unit, half the $10 per unit that it costs Charlotte to do the machining in-house. Should Charlotte accept Henry's offer? Show your calculations. 5. Charlotte produces 1,800 defective units at the machining operation. What is the cost to Charlotte of the defective items produced? Explain your answer briefly 6. Charlotte produces 1,800 defective units at the finishing operation. What is the cost to Charlotte of the defective items produced? Explain your answer brieflv. $10 per unit $6 per unit Print Done eck