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Zentech Phone Gear Inc. produces high quality, durable protective cases for a variety of cellular phones. The company just received a special order to produce 480 units of a modified case for a specific phone model. The unit cost for the regular case is $31 ($16 in total for variable costs and $15 for allocated fixed manufacturing overhead that is common to the company). A regular case is priced at $51/unit. Extra costs for the modified case would be as follows: - Extra paint and plastic required for the modified case costs $3 per unit. - Adjustments to the design of the modified case costs $3,216 (a one-time cost). The price charged for a modified case is $55/unit. For each modified case produced and sold, the production and sale of a regular case must be given up. (i.e. Zentech Phone Gear is currently operating at full capacity). Should the company accept the order for the modified cases? Do not enter dollar signs or commas in the input boxes. Round Fixed Cost per unit and Total Relevant Cost to 2 decimal places Foregone Contribution Margin per Unit: $ Variable Cost per Unit: $ Fixed Cost per Unit: $ Total Relevant Costs: $ Accept or Reject: Balk Company is currently manufacturing Part P140. It produces 58,600 units of Part P140 per year. This part is used in the manufacturing of many products produced by Balk. The breakdown of the cost per unit for P140 is shown below. Direct Materials $4.50 Direct Labor $6.00 Variable Overhead $5.50 Fixed Overhead $3.00 Unit Cost $19.00 The fixed overhead cost (at $3.00/unit above) would still remain with the company even if Balk stops manufacturing Part P140.- outside supplier has offered to sell the same part to Balk for $19.00. Currently, there is no alternative use for the capital assets used to produce Part P140. These capital assets will not be sold if the company chooses to buy Part P140. Do not enter dollar signs or commas in the input boxes. Use the negative sign for a negative change in operating income. a) Should Balk Company make or buy Part P140? Cost to Make: $ Cost to Buy: $ Therefore Balk should: b) What is the maximum price Balk should be willing to pay an outside supplier for the part? Maximum Price: $ Should Balk Company make or buy Part P140? ost to Make: $ ost to Buy: $ > herefore Balk should: ) What is the maximum price Balk should be willing to pay an outside supplier for the part? Maximum Price: $ c) If Balk buys the part for $7 instead of making it, by how much will operating income increase or decrease? Change in operating income: $

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