Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 12,400 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e. g. -45 or parentheses e. g. (45).) Make Buy Net Income Increase (Decrease) Variable manufacturing costs $enter variable manufacturing costs in dollars $enter variable manufacturing costs in dollars $enter variable manufacturing costs in dollars Fixed manufacturing costs enter fixed manufacturing costs in dollars enter fixed manufacturing costs in dollars enter fixed manufacturing costs in dollars Purchase price enter the purchase price in dollars enter the purchase price in dollars enter the purchase price in dollars Total annual cost $enter total annual cost in dollars $enter total annual cost in dollars $enter total annual cost in dollars The decision should be to select between make and buy the part.

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?