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97. At what selling price per unit should Immanuel be indifferent between accepting or
rejecting the special offer?
98. Suppose that regular sales of jigs total 85,000 units per month. All other conditions
remain the same. If Immanuel accepts the special order, the change in monthly net operating
income will be:
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Mckerchie Inc. manufactures industrial components. One of its products, which is used in
the construction of industrial air conditioners, is known as G62. Data concerning this product are
given below:
The above per unit data are based on annual production of 9,000 units of the component. Direct
labor can be considered to be a variable cost.
99. The company has received a special, one-time-only order for 300 units of component
G62. There would be no variable selling expense on this special order and the total fixed
manufacturing overhead and fixed selling and administrative expenses of the company would not
be affected by the order. Assuming that Mckerchie has excess capacity and can fill the order
without cutting back on the production of any product, what is the minimum price per unit on the
special order below which the company should not go?
100. The company has received a special, one-time-only order for 300 units of component
G62. There would be no variable selling expense on this special order and the total fixed
manufacturing overhead and fixed selling and administrative expenses of the company would not
be affected by the order. However, assume that Mckerchie has no excess capacity and this
special order would require 50 minutes of the constraining resource, which could be used instead
to produce products with a total contribution margin of $6,900. What is the minimum price per
unit on the special order below which the company should not go?
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101. Refer to the original data in the problem. What is the current contribution margin per unit
for component G62 based on its selling price of $160 and its annual production of 9,000 units?
The constraint at Dalbey Corporation is time on a particular machine. The company makes
three products that use this machine. Data concerning those products appear below:
102. Rank the products in order of their current profitability from most profitable to least
profitable. In other words, rank the products in the order in which they should be emphasized.
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103. Assume that sufficient time is available on the constrained machine to satisfy demand for
all but the least profitable product. Up to how much should the company be willing to pay to
acquire more of this constrained resource?
Marrin Corporation makes three products that use the current constraint-a particular type
of machine. Data concerning those products appear below:
104. Rank the products in order of their current profitability from most profitable to least
profitable. In other words, rank the products in the order in which they should be emphasized.
105. Assume that sufficient constraint time is available to satisfy demand for all but the least
profitable product. Up to how much should the company be willing to pay to acquire more of the
constrained resource?
Cress Company makes four products in a single facility. Data concerning these products
appear below:
The milling machines are potentially the constraint in the production facility. A total of 11,500
minutes are available per month on these machines.
106. How many minutes of milling machine time would be required to satisfy demand for all
four products?
107. Which product makes the LEAST profitable use of the milling machines?
108. Which product makes the MOST profitable use of the milling machines?
109. Up to how much should the company be willing to pay for one additional minute of milling
machine time if the company has made the best use of the existing milling machine capacity?
(Round off to the nearest whole cent.)
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Broze Company makes four products in a single facility. These products have the following
unit product costs:
Additional data concerning these products are listed below.
The grinding machines are potentially the constraint in the production facility. A total of 53,600
minutes are available per month on these machines.
Direct labor is a variable cost in this company.
110. How many minutes of grinding machine time would be required to satisfy demand for all
four products?
111. Which product makes the LEAST profitable use of the grinding machines?
112. Which product makes the MOST profitable use of the grinding machines?
113. Up to how much should the company be willing to pay for one additional minute of
grinding machine time if the company has made the best use of the existing grinding machine
capacity? (Round off to the nearest whole cent.)
Dunford Company produces three products with the following costs and selling prices:
114. If Dunford has a limit of 20,000 direct labor hours but no limit on units sold or machine
hours, then the ranking of the products from the most profitable to the least profitable use of the
constrained resource is:
