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Integrated mix decision under labour constraint. Evergreen Electronics has 20,000 hours of skilled labour available and makes two products: Alpha – CM $30 | Labour 2 hrs | Max 6,000 units; Beta – CM $22 | Labour 1 hr | Max 12,000 units. Fixed costs unchanged. Determine the optimal mix and total contribution margin.

Summit Appliances is offered a special order for 1,000 units at $38 each. Normal price $50, variable cost $35, fixed cost unaffected, and idle capacity exists. What is the effect on net income?

A company using variable cost-plus pricing adds a fixed markup to cover fixed costs and target return. If actual sales fall below expected volume, the markup will:

At Cedar Craft Co., a special order for 5,000 units at $8.50 per unit is being considered. Variable manufacturing cost = $6.00 per unit; accepting the order does not change fixed costs and there is idle capacity. Should the order be accepted?

Frontier Foods Ltd. can sell a product for $15.00 per unit as is, or process further for an extra $4.00 per unit and incur variable processing cost of $2.00 per unit to sell at $18.50. Fixed costs are unchanged. Should the company process further?

Total cost-plus pricing. Blue Sky Cycles expects to sell 8,000 bikes per year. Total cost per unit = $320. Investment = $2,000,000; desired return = 15%. Compute the target selling price per unit.

In incremental analysis, depreciation on equipment already owned is always relevant.

Comprehensive incremental decision. Arctic Sportswear Ltd. makes 20,000 jerseys: Sales $50 each; Variable cost $30; Fixed costs $350,000. A competitor offers to supply jerseys for $32 each. If accepted, 40% of fixed costs are avoidable, and the factory can be rented for $60,000 per year. Should Arctic make or buy?

Northern Rail Co. considers replacing a machine: New machine cost $400,000, annual savings $90,000, old machine sale value $20,000, life 5 years, ignore time value. What is the total advantage or disadvantage of replacement?

Which technique involves careful, noninvasive, informed observations?