Ebbs Products, Inc., has a Motor Division that manufactures and sells a number of products, including a standard motor. Data concerning that motor appear below: Capacity in units 86,000Selling price to outside customers$81Variable cost per unit$43Fixed cost per unit (based on capacity)$18 The Automotive Division of Ebbs Products, Inc needs 9,000 special heavy-duty motors per year. The Motor Division's variable cost to manufacture and ship this special motor would be $46 per unit. Because these special motors require more manufacturing resources than the standard motor, the Motor Division would have to reduce its production and sales of standard motors to outside customers from 86,000 units per year to 72,500 units per year.What is the total contribution margin on sales to outside
customers that the Motor Division would give up if it were to make the special motors for the Automotive Division?
A. $342,000
B. $1,093,500
C. $513,000
D. $769,500
Answer: C
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The financial balances for the Atwood Company and the Franz Company as of December 31, 2018, are presented below. Also included are the fair values for Franz Company's net assets. Atwood FranzCo. FranzCo.?(all numbers are in thousands) Book value Book value Fair value 12/31/2018 12/31/2018 12/31/2018Cash$870 $240 $240 Receivables 660 600 600 Inventories 1,230 420 580 Land 1,800 260 250 Buildings (net) 1,800 540 650 Equipment (net) 660 380 400 Accounts payable (570) (240) (240)Accrued expenses (270) (60) (60)Long-term liabilities (2,700) (1,020) (1,120)Common stock ($20 par) (1,980) Common stock ($5 par) (420) Additional paid-in
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