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1. A company is planning to introduce laptop to its existing product line. Management must decide whether to make the premium laptop bag or buy it from an outside supplier. The lowest outside price is $20. If the case is produced internally, the company will have to purchase new equipment that will yield annual depreciation of $15,000. The company will also need to rent a new production facility at $30,000 a year. At 15,000 premium laptop bags per year, a preliminary analysis of production costs shows the following: DM DL Variable Overhead 3 Equipment Depreciation ! Building rental Allocated fixed overhead 4 Total cost S7 (1) Determine whether the company should make the premium laptop bags or buy them from the outside supplier. (2) What decision should be made if only 10,000 premium laptop bags are needed? Note: Please show the steps and base your answer solely from monetary perspective, without considering any other factor like the suppliers' dependability, quality control etc. 2. Parker Plumbing has received a special one-time order for 1,500 faucets (units) at $5 per unit. Parker currently produces and sells 7,500 units at $6.00 each. This level represents 75% of its capacity. Production costs for these units are $4.50 per unit, which includes $3.00 variable cost and $1.50 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $1,000 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. Should the company accept the special order? Show calculations and use the concept of incremental revenues and incremental costs. Prepare the 2018 common-base year balance sheet for Just Dew It. (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) 10 points 2017 2018 Skipped $ $ eBook 7.400 23.400 76,200 107,000 15,120 25,200 89,040 129,360 Print $ $ References $ $ 293,000 400 000 $ $ 350,640 480,000 Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total liabilities and owners' equity $ $ $ $ 61,600 14,400 76,000 48,000 $ $ $ $ 62,160 18,240 80,400 36,000 $ $ 60,000 216,000 276,000 400,000 60,000 303,600 363 600 480,000 $ $ S $ 1. A company is planning to introduce laptop to its existing product line. Management must decide whether to make the premium laptop bag or buy it from an outside supplier. The lowest outside price is $20. If the case is produced internally, the company will have to purchase new equipment that will yield annual depreciation of $15,000. The company will also need to rent a new production facility at $30,000 a year. At 15,000 premium laptop bags per year, a preliminary analysis of production costs shows the following: DM DL Variable Overhead 3 Equipment Depreciation ! Building rental Allocated fixed overhead 4 Total cost S7 (1) Determine whether the company should make the premium laptop bags or buy them from the outside supplier. (2) What decision should be made if only 10,000 premium laptop bags are needed? Note: Please show the steps and base your answer solely from monetary perspective, without considering any other factor like the suppliers' dependability, quality control etc. 2. Parker Plumbing has received a special one-time order for 1,500 faucets (units) at $5 per unit. Parker currently produces and sells 7,500 units at $6.00 each. This level represents 75% of its capacity. Production costs for these units are $4.50 per unit, which includes $3.00 variable cost and $1.50 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $1,000 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. Should the company accept the special order? Show calculations and use the concept of incremental revenues and incremental costs. Prepare the 2018 common-base year balance sheet for Just Dew It. (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) 10 points 2017 2018 Skipped $ $ eBook 7.400 23.400 76,200 107,000 15,120 25,200 89,040 129,360 Print $ $ References $ $ 293,000 400 000 $ $ 350,640 480,000 Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total liabilities and owners' equity $ $ $ $ 61,600 14,400 76,000 48,000 $ $ $ $ 62,160 18,240 80,400 36,000 $ $ 60,000 216,000 276,000 400,000 60,000 303,600 363 600 480,000 $ $ S $

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