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The mixing department makes 175,000 grams of direct materials mixture [enough to make 350,000 tablets) because the tablet-making department has only enough capacity to process

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The mixing department makes 175,000 grams of direct materials mixture [enough to make 350,000 tablets) because the tablet-making department has only enough capacity to process 350,000 tablets. All direct material costs of $171, 500 are incurred In the mixing department. The tablet-making department manufactures only 343,000 tablets from the 175 comma 000175,000 grams of mixture processed; 2% of the direct materials mixture is lost in the tablet-making process. Each tablet sells for $7.00. All costs other than direct material costs are fixed costs. The following requirements refer only to the preceding data. There is no connection between the requirements. Calculate the following: At outside contractor makes the following offer: if Agnello will supply the contractor with 8 comma 0008.000 grams of mixture, the contractor will manufacture 15 comma 68015, 680 tablets for Agnello [allowing for the normal 2% loss of the mixture during the tablet-making process) at S 0.050.50 per tablet. Should Agnello accept the contractor's offer? Show your tabulations. Another company offers to prepare 16,000 grams of mixture a month from direct materials Agnello supplies. The company will charge $0.12$0.12 tablets per gram of mixture. Should Agnello accept the company's offer ? Show your calculations. Agnello's engineers have devised a method that would improve quality in the tablet-making department. They estimate that the 7 comma 0007,000 tablets currently being last would be saved. The modification would cost $9,000 a month. Should Agnello implement the new method? Show your calculations. Suppose that Agnello also loses 7,000 grams of mixture in its mixing department. The company can reduce these losses to zero if it spends $13,000 per month in quality improvement methods. Should Agnello adopt the quality improvement method? Show your calculations. What are the benefits of improving quality in the mixing department compared with improving quality In the tablet making department

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