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Volkman Corporation makes and sells various holiday items. One of its segments, which began operations in Year 1, produces The Magic Snow Globe, an innovative
Volkman Corporation makes and sells various holiday items. One of its segments, which began operations in Year 1, produces The Magic Snow Globe, an innovative snow globe that allows communication over wireless and.cellular networks. 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 snow globes is between 8,000 and 41,000 units per year: PART 1: What is the per unit contribution margin? PART 2. What is the division's breakeven point in units? PART 3: A large discount store has approached the owner of Volkman about buying 20,000 snow globes. The discount store is only willing to pay only $48 per unit. Based on quantitative factors alone, should Volkman accept the special order? Specifically, by what amount would the special-order increase or decrease profitability? PART 5: Volkman is currently considering investing in "Machine A " that will enable greater manufacturing efficiency. The machine is expected to have a useful life of 10 years, a salvage value of $10,000, and a purchase price of $496,000. What amount of depreciation expense would be reported each year using straight-line depreciation? \$ PART 6: During the current year (Year 1), Volkman produced 25,000 snow globes although only 16,000 were sold. Due to increased demand, Volkman believes 41,000 snows globes will be sold next year. If Volkman wishes to end Year 2 with 1,000 snow globes in inventory, how many units should be produced in Year 2
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