27. Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseball Units Sales Variable costs Fixed costs Net income Yards of leather per unit Profit per unit Contribution margin per unit 2,000 $60,000 24,000 10.000 $26.000 1.25 $13.00 $18.00 2,500 $25,000 13,750 5.250 $ 6.000 0.30 $2.40 $4.50 Assume that Gallery is able to order an additional 2,500 yards of leather and wishes to maximize its income. Of the additional units it produces, at least 500 of each product are necessary for sales. Instructions How many units of each must be produced? 28. Pederson Enterprises produces giant stuffed bears. Each bear consists of $12 of variable costs and $9 of fixed costs and sells for $45. A wholesaler offers to buy 8,000 units at $14 each, of which Pederson has the capacity to produce. Pederson will incur extra shipping costs of $1 per bear. Instructions Determine the incremental income or loss that Pederson Enterprises would realize by accepting the special order. 29. Notson, Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Notson for $420 each. Notson needs 1,200 clocks annually. Notson has provided the following unit costs for its commercial clocks: Direct materials $100 Direct labor Variable overhead 80 Fixed overhead (40% avoidable) 140 150 Instructions Prepare an incremental analysis which shows the effect of the make-or-buy decision. 30. Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butte mividual products is not affected by changes in other product lines. 30% of the hixed costs are direct, and the other 70% are allocated. Results of June follow: Sour Cream Ice Cream Yogurt Butter Total Units sold 2,000 500 400 400 200 3,100 Revenue $10,000 $20,000 $10,000 $20,000 $60,000 Variable departmental 6,000 13,000 4,200 4,800 28,000 costs Fixed costs 5.000 2.000 7.000 17.000 Net income (loss) $(1.000) $ 5.000 $ 2.800 $ 8.200 $15.000 3.000 Instructions Prepare an incremental analysis of the effect of dropping the sour cream product line