117. Highbank Company is operating at 80% of its manufacturing capacity of 62,000 product units per year. A customer has offered to buy an additional 10,000 units at $17 each and sell them outside the...

117. Highbank Company is operating at 80% of its manufacturing capacity of 62,000 product units per year. A customer has offered to buy an additional 10,000 units at $17 each and sell them outside the country so as not to compete with Highbank. The following data are available:

In producing 10,000 additional units fixed overhead costs would remain at their current level but incremental variable overhead costs of $0.75 per unit would be incurred. What is the effect on total income if Highbank accepts this order?

118. Wear Company is operating at 70% of its manufacturing capacity of 78,000 product units per year. A customer has offered to buy an additional 18,000 units at $41 each and sell them outside the country so as not to compete with Wear Company. The following data are available:

In producing 18,000 additional units fixed overhead costs would remain at their current level but incremental variable overhead costs of $1.28 per unit would be incurred. What is the effect on total income if Wear Company accepts this order?

119. Stone Company manufactures a product that contains a small lens. The company has always purchased this lens from a supplier for $17 each. Stone recently upgraded its own manufacturing capabilities and now has enough excess capacity (including trained workers) to begin manufacturing the lens instead of buying it. The company prepared the following per unit cost projections of making the lens, assuming that overhead is allocated to the part at the normal predetermined overhead rate of 75% of direct labor cost:

The required volume of output to produce the lenses will not require any incremental fixed overhead. Incremental variable overhead cost is $0.68 per lens. Should Stone Company make or buy the lenses?