Westerville Company reported the following results from last year's operations: Sales $ 1,400,000 Variable expenses 510,000 Contribution margin Fixed expenses 890,000 610,000 Net operating income $ 280,000 Average operating assets $ 875,000 This year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics: Sales $ 280.000 Contribution margin ratio 50 96 of sales Fixed expenses $ 98,000 The company's minimum required rate of return is 15%. 11. What is last year's residual income? The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Company's three products: A, B, and C: Product A Selling price $ 70.00 $ 170.00 $ 170.00 79.00 Variable costs: Direct materials 25.50 103.50 Direct labour 17.50 21.00 Variable manufacturing overhead 3.00 35.00 2.50 5.00 45.50 119.00 Total variable cost 127.50 $ $ 51.00 24.50 Contribution margin 42.50 25 30 96 35 Contribution margin ratio Due to a strike in the plant of one of its competitors, demand for the company's products far exceeds its capacity to produce. Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labour rate is $7 per hour, and only 3,970 hours of labour time are available each week. Required: 1. Compute the amount of contribution margin that will be obtained per hour of labour time spent on each product. (Round your intermediate calculations to 1 decimal place. Round your answers to 2 decimal places.) 2. Which orders would you recommend that the company work on next week -the orders for product Aproduct B, or product C? multiple choice Product C Product A Product B 3. By paying overtime wages, more than 3.970 hours of direct labour time can be made available next week. Up to how much should the company be willing in infilled demand for the 3. By paying overtime wages, more than 3,970 hours of direct labour time can be made available next week. Up to how much should the company be willing to pay per hour in overtime wages as long as there is unfilled demand for the three products? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Sato Jewellers has had a request for a special order for 10 gold bangles for the members of a wedding party. The normal selling price of a gold bangle is $384.00 and its unit product cost is $256.00, as shown below: Direct materials 136.00 Direct labour 84.00 Manufacturing overhead 36.00 Unit product cost $ 256.00 Most of the manufacturing overhead is fixed and unaffected by variations in how much jewellery is produced in any given period. However, 59 of the overhead is variable, depending on the number of bangles produced. The customer would like special filigree applied to the bangles. This filigree would require additional materials costing S8 per bangle and would also require acquisition of a special tool costing 5480 that would have no other use once the special order was completed. This order would have no effect on the company's regular sales, and the order could be filled using the company's existing capacity without affecting any other order. Required: a. What effect would accepting this order have on the company's operating income if a special price of $344.00 is offered per bangle for this order? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Westerville Company reported the following results from last year's operations: Sales $ 1,400,000 Variable expenses 510,000 Contribution margin Fixed expenses 890,000 610,000 Net operating income $ 280,000 Average operating assets $ 875,000 This year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics: Sales $ 280.000 Contribution margin ratio 50 96 of sales Fixed expenses $ 98,000 The company's minimum required rate of return is 15%. 11. What is last year's residual income? The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Company's three products: A, B, and C: Product A Selling price $ 70.00 $ 170.00 $ 170.00 79.00 Variable costs: Direct materials 25.50 103.50 Direct labour 17.50 21.00 Variable manufacturing overhead 3.00 35.00 2.50 5.00 45.50 119.00 Total variable cost 127.50 $ $ 51.00 24.50 Contribution margin 42.50 25 30 96 35 Contribution margin ratio Due to a strike in the plant of one of its competitors, demand for the company's products far exceeds its capacity to produce. Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labour rate is $7 per hour, and only 3,970 hours of labour time are available each week. Required: 1. Compute the amount of contribution margin that will be obtained per hour of labour time spent on each product. (Round your intermediate calculations to 1 decimal place. Round your answers to 2 decimal places.) 2. Which orders would you recommend that the company work on next week -the orders for product Aproduct B, or product C? multiple choice Product C Product A Product B 3. By paying overtime wages, more than 3.970 hours of direct labour time can be made available next week. Up to how much should the company be willing in infilled demand for the 3. By paying overtime wages, more than 3,970 hours of direct labour time can be made available next week. Up to how much should the company be willing to pay per hour in overtime wages as long as there is unfilled demand for the three products? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Sato Jewellers has had a request for a special order for 10 gold bangles for the members of a wedding party. The normal selling price of a gold bangle is $384.00 and its unit product cost is $256.00, as shown below: Direct materials 136.00 Direct labour 84.00 Manufacturing overhead 36.00 Unit product cost $ 256.00 Most of the manufacturing overhead is fixed and unaffected by variations in how much jewellery is produced in any given period. However, 59 of the overhead is variable, depending on the number of bangles produced. The customer would like special filigree applied to the bangles. This filigree would require additional materials costing S8 per bangle and would also require acquisition of a special tool costing 5480 that would have no other use once the special order was completed. This order would have no effect on the company's regular sales, and the order could be filled using the company's existing capacity without affecting any other order. Required: a. What effect would accepting this order have on the company's operating income if a special price of $344.00 is offered per bangle for this order? (Do not round intermediate calculations. Round your answer to 2 decimal places.)