You have been asked to assist the management of Ironwood Corporation in arriving at certain decisions. Ironwood has its home office in Michigan and leases factory buildings in Wisconsin, Minnesota, and North Dakota, all of which produce the same product. Ironwood's management provided you with a projection of operations for next year, as follows. Total Wisconsin Minnesota North Dakota Sales revenue $ 892,000 $ 444,000 $ 289,000 $ 159,000 Fixed costs Factory 211,000 107,000 54,000 50,000 Administration 75,000 46,000 23,000 6,000 Variable costs 284,000 135,000 81,000 68,000 Allocated home office costs 97,000 45,000 34,000 18,000 Total $ 667,000 $ 333,000 $ 192,000 $ 142,000 Operating profit $ 225,000 $ 111,000 $ 97,000 $ 17,000 The sales price per unit is $5. Due to the marginal results of operations of the factory in North Dakota, Ironwood has decided to cease its operations and sell that factory's machinery and equipment by the end of this year. Ironwood expects that the proceeds from the sale of these assets would equal all termination costs. Ironwood, however, would like to continue serving most of its customers in that area if it is economically feasible and is considering one of the following three alternatives: Expand the operations of the Minnesota factory by using space presently idle. This move would result in the following changes in that factory's operations. Increase over Minnesota factory's current operations Sales revenue 51 % Fixed costs Factory 19 Administration 11 Under this proposal, variable costs would be $2 per unit sold. Enter into a long-term contract with a competitor that will serve that area's customers. This competitor would pay Ironwood a royalty of $0.9 per unit based on an estimate of 31,000 units being sold. Close the North Dakota factory and not expand the operations of the Minnesota factory. Total home office costs of $97,000 will remain the same under each situation. Required: To assist the management of Ironwood Corporation, complete the following schedule computing Ironwood's estimated operating profit from each of the following options: a. Expansion of the Minnesota factory. b. Negotiation of the long-term contract on a royalty basis. c. Shutdown of the North Dakota operations with no expansion at other locations.

00 510 2 points Increase over Minnesota factory's current operations Sales revenue Fixed costa Factory 19 Administration 11 eBook Print Under this proposal, variable costs would be $2 per unit sold. .Enter into a long-term contract with a competitor that will serve that area's customers. This competitor would pay Ironwood a royalty of $0.9 per unit based on an estimate of 31.000 units being sold. Close the North Dakota factory and not expand the operations of the Minnesota factory. Total home office costs of $97,000 will remain the same under each situation. Required: To assist the management of Ironwood Corporation, complete the following schedule computing Ironwood's estimated operating profit from each of the following options: a. Expansion of the Minnesota factory b. Negotiation of the long-term contract on a royalty basis. c. Shutdown of the North Dakota operations with no expansion at other locations. B Complete this question by entering your answers in the tabs below. Required Required Required Expansion of the Minnesota factory. IRONWOOD CORPORATION Computation of Estimated Profit from Operations after Expansion of Minnesota Factory Minnesota factory Sales Costs Factory Administration Variable costs Allocated home office costs Total Estimated operating profit Wisconsin factory-estimated operating profit Less: Home office costs previously allocated to North Dakota factory Estimated operating profit Required A Required B > 8 2 points and sell that factory's machinery and equipment by the end of this year, Ironwood expects that the proceeds from the sale of these assets would equal al termination costs. Ironwood, however, would like to continue serving most of its customers in that area if it is economically feasible and is considering one of the following three alternatives: Expand the operations of the Minnesota factory by using space presently idle. This move would result in the following changes in that factory's operations. Increase over Minnesota factory's current operations Sales revenue 518 Fixed costo Factory 19 Administration 11 eBook Print Under this proposal, variable costs would be $2 per unit sold. Enter into a long-term contract with a competitor that will serve that area's customers. This competitor would pay Ironwood a royalty of $0.9 per unit based on an estimate of 31,000 units being sold. Close the North Dakota factory and not expand the operations of the Minnesota factory. Total home office costs of $97,000 will remain the same under each situation. Required: To assist the management of Ironwood Corporation, complete the following schedule computing Ironwood's estimated operating profit from each of the following options a. Expansion of the Minnesota factory. b. Negotiation of the long-term contract on a royalty basis. c. Shutdown of the North Dakota operations with no expansion at other locations. Complete this question by entering your answers in the tabs below. Required Required Required A B Negotiation of the long-term contract on a royalty basis. IRONWOOD CORPORATION Computation of Estimated Profit from Operations after Negotiation of Royalty Contract Estimated operating profit: Wisconsin factory Minnesota factory Estimated royalties to be received S 0 Less: Home office costs previously allocated to North Dakota factory Estimated operating profit Required A Required C > 00 Due to the marginal results of operations of the factory in North Dakota, Ironwood has decided to cease its operations and sell that factory's machinery and equipment by the end of this year. Ironwood expects that the proceeds from the sale of these assets would equal all termination costs. Ironwood, however, would like to continue serving most of its customers in that area if it is economically feasible and is considering one of the following three alternatives: Expand the operations of the Minnesota factory by using space presently idle. This move would result in the following changes in that factory's operations. 2 points eBook Increase over Minnesota factory's current operations Sales revenue 510 Fixed costs Factory 19 Administration 11 Print Under this proposal, variable costs would be $2 per unit sold. Enter into a long-term contract with a competitor that will serve that area's customers. This competitor would pay Ironwood a royalty of $0.9 per unit based on an estimate of 31.000 units being sold. Close the North Dakota factory and not expand the operations of the Minnesota factory. Total home office costs of $97,000 will remain the same under each situation. Required: To assist the management of Ironwood Corporation, complete the following schedule computing Ironwood's estimated operating profit from each of the following options: a. Expansion of the Minnesota factory. b. Negotiation of the long-term contract on a royalty basis. c. Shutdown of the North Dakota operations with no expansion at other locations. Complete this question by entering your answers in the tabs below. Required Required Required A B Shutdown of the North Dakota operations with no expansion at other locations. IRONWOOD CORPORATION Computation of Estimated Profit from Operations after Shutdown of North Dakota Factory Estimated operating profit: Wisconsin factory Minnesota factory S 0 Less: Home office costs previously allocated to North Dakota factory Estimated operating profit 8 2 points and sell that factory's machinery and equipment by the end of this year, Ironwood expects that the proceeds from the sale of these assets would equal al termination costs. Ironwood, however, would like to continue serving most of its customers in that area if it is economically feasible and is considering one of the following three alternatives: Expand the operations of the Minnesota factory by using space presently idle. This move would result in the following changes in that factory's operations. Increase over Minnesota factory's current operations Sales revenue 518 Fixed costo Factory 19 Administration 11 eBook Print Under this proposal, variable costs would be $2 per unit sold. Enter into a long-term contract with a competitor that will serve that area's customers. This competitor would pay Ironwood a royalty of $0.9 per unit based on an estimate of 31,000 units being sold. Close the North Dakota factory and not expand the operations of the Minnesota factory. Total home office costs of $97,000 will remain the same under each situation. Required: To assist the management of Ironwood Corporation, complete the following schedule computing Ironwood's estimated operating profit from each of the following options a. Expansion of the Minnesota factory. b. Negotiation of the long-term contract on a royalty basis. c. Shutdown of the North Dakota operations with no expansion at other locations. Complete this question by entering your answers in the tabs below. Required Required Required A B Negotiation of the long-term contract on a royalty basis. IRONWOOD CORPORATION Computation of Estimated Profit from Operations after Negotiation of Royalty Contract Estimated operating profit: Wisconsin factory Minnesota factory Estimated royalties to be received S 0 Less: Home office costs previously allocated to North Dakota factory Estimated operating profit Required A Required C > 00 Due to the marginal results of operations of the factory in North Dakota, Ironwood has decided to cease its operations and sell that factory's machinery and equipment by the end of this year. Ironwood expects that the proceeds from the sale of these assets would equal all termination costs. Ironwood, however, would like to continue serving most of its customers in that area if it is economically feasible and is considering one of the following three alternatives: Expand the operations of the Minnesota factory by using space presently idle. This move would result in the following changes in that factory's operations. 2 points eBook Increase over Minnesota factory's current operations Sales revenue 510 Fixed costs Factory 19 Administration 11 Print Under this proposal, variable costs would be $2 per unit sold. Enter into a long-term contract with a competitor that will serve that area's customers. This competitor would pay Ironwood a royalty of $0.9 per unit based on an estimate of 31.000 units being sold. Close the North Dakota factory and not expand the operations of the Minnesota factory. Total home office costs of $97,000 will remain the same under each situation. Required: To assist the management of Ironwood Corporation, complete the following schedule computing Ironwood's estimated operating profit from each of the following options: a. Expansion of the Minnesota factory. b. Negotiation of the long-term contract on a royalty basis. c. Shutdown of the North Dakota operations with no expansion at other locations. Complete this question by entering your answers in the tabs below. Required Required Required A B Shutdown of the North Dakota operations with no expansion at other locations. IRONWOOD CORPORATION Computation of Estimated Profit from Operations after Shutdown of North Dakota Factory Estimated operating profit: Wisconsin factory Minnesota factory S 0 Less: Home office costs previously allocated to North Dakota factory Estimated operating profit