Laser Cast Inc. manufactures color laser printers. Model J20 presently sells for $575 and has a product cost of $460, as follows:

Direct materials	$330
Direct labor	90
Factory overhead	40
Total	$460

It is estimated that the competitive selling price for color laser printers of this type will drop to $550 next year. Laser Cast has established a target cost to maintain its historical markup percentage on product cost. Engineers have provided the following cost-reduction ideas:

1. Purchase a plastic printer cover with snap-on assembly, rather than with screws. This will reduce the amount of direct labor by 9 minutes per unit.
2. Add an inspection step that will add six minutes per unit of direct labor but reduce the materials cost by $12 per unit.
3. Decrease the cycle time of the injection molding machine from four minutes to three minutes per part. Thirty percent of the direct labor and 42% of the factory overhead are related to running injection molding machines.

The direct labor rate is $38 per hour.

a. Determine the target cost for Model J20, assuming that the historical markup on product cost and selling price are maintained. Round your final answer to two decimal places. $fill in the blank 1 per unit

b. Determine the required cost reduction. Enter as a positive number. Round your final answer to two decimal places. $fill in the blank 2 per unit

c. Evaluate the three engineering improvements together to determine if the required cost reduction (drift) can be achieved. Enter all amounts as positive numbers. Do not round interim calculations but round your final answers to two decimal places.

1. Direct labor reduction	$fill in the blank 3	per unit
2. Additional inspection	$fill in the blank 4	per unit
3. Injection molding productivity improvement	$fill in the blank 5	per unit
Total savings	$fill in the blank 6	per unit

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A condensed income statement by product line for Warrick Beverage Inc. indicated the following for Mango Cola for the past year:

Sales	$236,100
Cost of goods sold	(111,000)
Gross profit	$125,100
Operating expenses	(143,000)
Operating loss	$(17,900)

It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 20% of the operating expenses are fixed. Because Mango Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued.

a. Prepare a differential analysis dated February 29 to determine whether Mango Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.

Differential Analysis
Continue (Alt. 1) or Discontinue (Alt. 2) Mango Cola
February 29
	Continue Mango Cola (Alternative 1)	Discontinue Mango Cola (Alternative 2)	Differential Effects (Alternative 2)
Revenues	$fill in the blank 70974406cf94026_1	$fill in the blank 70974406cf94026_2	$fill in the blank 70974406cf94026_3
Costs:
Variable cost of goods sold	fill in the blank 70974406cf94026_4	fill in the blank 70974406cf94026_5	fill in the blank 70974406cf94026_6
Variable operating expenses	fill in the blank 70974406cf94026_7	fill in the blank 70974406cf94026_8	fill in the blank 70974406cf94026_9
Fixed costs	fill in the blank 70974406cf94026_10	fill in the blank 70974406cf94026_11	fill in the blank 70974406cf94026_12
Profit (Loss)