Help Save & Exit Su Check my wo TutStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the company's products is a heavy duty corrosion-resistant metal drum, called the WVD drum, used to store toxic wastes. Production is constrained by the capacity of an automated welding machine that is used to make precision welds. A total of 2,480 hours of welding time is available annually on the machine. Because each drum requires 0.4 hours of welding machine time, annual production is limited to 5,600 drums. At present, the welding machine is used exclusively to make the WVD drums. The accounting department has provided the following financial data concerning the WVD drums: $245.ee WVD Drums Selling price per drum Cost per drum! Direct materials Direct labor (542 per hour) Manufacturing overhead Selling and administrative efense Margin per drun $52.10 8.40 18.90 34.60 114.00 $131.00 Management believes 7,500 WVD drums could be sold each year if the company had sufficient manufacturing capacity. As an alternative to adding another welding machine, management has considered buying additional drums from an outside supplier Harcor Industries, Inc., a supplier of quality products, would be able to provide up to 4,600 WVD-type drums per year at a price of $210 per drum, which TutStuff would resell to its customers at its normal selling price after appropriate relabeling. Megan Flores, TulStuff's production manager, has suggested that the company could make better use of the welding machine by manufacturing bike frames, which would require only 0.5 hours of welding machine time per frame and yet sell for far more than the drums. Megan believes that TufStuff could sell up to 2,080 bike frames per year to bike manufacturers at a price of $359 each. The accounting department has provided the following data concerning the proposed new product: 0:5320 Required: 1. Would you be comfortable relying on the financial data provided by the accounting department for making decisions related to the WVD drums and bike frames? 2. Compute the contribution margin per unit. (assume direct labor is a fixed cost) 3. Compute the contribution margin per welding hour. (assume direct labor is a fixed cost 4. Assuming direct labor is a fixed cost a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured. b. What is the increase (decrease) in net operating income that would result from this plan over current operations? 5. Compute the contribution margin per unit (assume direct labor is a variable cost) 6. Compute the contribution margin per welding hour. (assume direct labor is a variable cost] 7. Assuming direct labor is a variabile cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured. [Assume direct laboris a variable cost) b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4A Reg 48 Reqs Req6 Req 7A Req 78 Compute the contribution margin per unit. (assume direct labor is a fixed cost) (Do not round intermediate calculations. Round your answers to 2 decimal places.) 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bil that should be manufactured. [Assume direct labor is a variable cost] b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Reg 4A Req 4B Reg 5 Reg 6 Req 7A Req 78 Reg 4A Compute the contribution margin per unit. [ussowie direct labor is a fixed cost] (Do not round intermediate calculations. Round your answers to 2 decimal places.) Contribution Margin per unit a. Purchased WVD drums b. Manufactured WVD drums c. Manufactured bike frames per unit per unit 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frar that should be manufactured. (Assume direct labor is a variable cost] b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req Req 4A Req 4B Req 5 Reg 6 Req 7A Req 78 Compute the contribution margin per welding hour. (assume direct labor is a fixed cost) (Round your intermediate calculations and final answers to 2 decimal places.) Contribution Margin per hour 1. Manufactured WVD drums 2. Manufactured bike frames per hour Chec 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames that should be manufactured. [Assume direct labor is a variable cost) b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Req 4B Req 5 Req 6 Req 7A Req 7B Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured. [Assume direct labor is a fixed cost] Purchased Manufactured WVD drums Bike frames Rea 48 > 0. compule ule LOLILIIDULUI Idiyi pei weiung Toul. (assunie uleLL IDDOI IS A Validie LUS 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike that should be manufactured. (Assume direct labor is a variable cost] b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Req 4 keq 4B Reg 5 Req 6 Req 7A Req 7B What is the increase (decrease) in net operating income that would result from this plan over current operations? [Assume direct labor is a fixed cost] (Round your intermediate calculations to 2 decimal places. Round final answer to the nearest whole dollar value.) Increase (decrease) in net operating income ( Req 4A Req5 > 0. Lumpule ule Con IDULUI Tanymi pei weiuniy Houl. (assume ullell Iduur is a Valldie LUSU 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or that should be manufactured. [Assume direct labor is a variable cost] b. What is the increase (decrease) in net operating income that would result from this plan over current operation: Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req3 Req 4A Reg 4B Reg 5 Reg 6 Req 7A Req 7B Compute the contribution margin per unit. (assume direct labor is a variable cost] (Do not round intermediate calculati Round your answers to 2 decimal places.) Contribution Margin per unit Purchased WVD drums Manufactured WVD drums Manufactured bike frames per unit per unit 0. Compule ule Con IDULOn diyni pei weiuniy noul assume unelt IDDUI a validule LUSY 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bi that should be manufactured. [Assume direct labor is a variable cost) b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Complete this question by entering your answers in the tabs below. Req1 Reg 2 Req3 Req 4A Reg 4B Reg 5 Rea6 Req 7A Req 7B Compute the contribution margin per welding hour. (assume direct labor is a variable cost] (Round your intermediate calculations and final answers to 2 decimal places.) Manufactured WVD drums Manufactured bike frames Contribution Margin per hour per hour 0 COMPLEUR CUIUIDULOT lidiyu per weinig rui assume UELL IGUUIIS O VIDIU LUSU 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike fr that should be manufactured. [Assume direct labor is a variable cost] b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Req 4A Req 4B Reg 5 Reg 6 Ret 7A Req 7B Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames ( any) that should be manufactured. [Assume direct labor is a variable cost] Purchased Manufactured WVD drums Bike frames J. PULCHOLIVU Horyh. pe LUJJU HELTUVUI U VRTOVIGLUY 6. Compute the contribution margin per welding hour. (assume direct labor is a variable cost] 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike that should be manufactured. [Assume direct labor is a variable cost] b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Reg 4A Reg 4B Req 5 Reg 6 Req 7A Req 7B What is the increase (decrease) in net operating income that would result from this plan over current operations? [Assume direct labor is a variable cost] (Do not round intermediate calculations.) Increase (decreaso) in not operating income ( Req 7A Reg 78