tonvictatakombinerendahindl con Help 50 2 Walton Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, un 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 between 34,000 and 72.000 units per year $495.000 45-22 evenue (45,000 units $11.00) Unit level variable coste Materials cost (45,000 $3.00) Labor cest (45,000 $2.00) Manufacturing overhead (45,000 $0.30) Shipping and handling (45,000 - $0.25) Sales Commissions (45,000 $2.00) Contribution margin Fixed expenses Advertising costs Salary of production supervisor Allocated company wide facility-level expenses Net loss (135,000) (90,000) (13,500) (11,250) (90,000) 155, 250 (31.000) (67,000) (83,000) $ (25,250) Required a. A large discount store has approached the owner of Walton about buying 7000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Walton'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 $5.80 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Walton accept the special order? b-1. Walton has an opportunity to buy the 45,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each The product meets Walton's quality standards. Walton could continue to use its own logo, advertising program, and sales force to distribute the products. Calculate the total cost for Walton to make and buy the 45,000 calculators b-2. Should Walton buy the calculators or continue to make them? b-3. Should Walton buy the calculators or continue to make them, if the volume of sales were increased to 72.000 units? c. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Specifically, by what amount would the segment's elimination increase or decrease profitability? arch ORA g tonvictatakombinerendahindl con Help 50 2 Walton Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, un 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 between 34,000 and 72.000 units per year $495.000 45-22 evenue (45,000 units $11.00) Unit level variable coste Materials cost (45,000 $3.00) Labor cest (45,000 $2.00) Manufacturing overhead (45,000 $0.30) Shipping and handling (45,000 - $0.25) Sales Commissions (45,000 $2.00) Contribution margin Fixed expenses Advertising costs Salary of production supervisor Allocated company wide facility-level expenses Net loss (135,000) (90,000) (13,500) (11,250) (90,000) 155, 250 (31.000) (67,000) (83,000) $ (25,250) Required a. A large discount store has approached the owner of Walton about buying 7000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Walton'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 $5.80 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Walton accept the special order? b-1. Walton has an opportunity to buy the 45,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each The product meets Walton's quality standards. Walton could continue to use its own logo, advertising program, and sales force to distribute the products. Calculate the total cost for Walton to make and buy the 45,000 calculators b-2. Should Walton buy the calculators or continue to make them? b-3. Should Walton buy the calculators or continue to make them, if the volume of sales were increased to 72.000 units? c. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Specifically, by what amount would the segment's elimination increase or decrease profitability? arch ORA g