Jose Martinez of El Paso has developed a polished stainless steel tortilla machine that makes it a "showpiece" for display in Mexican restaurants. His forecast of capacity and demand follows:
Month
1 2 3 4 5
Demand Capacity 150 160 140 220 240
Regular time 150 150 150 160 160
Overtime 10 30 10 20 20
Subcontracting: 90 units available over the 5-month period
Beginning inventory: 0 units
Ending inventory required: 10 units
Costs
Regular-time cost per unit $90
Overtime cost per unit $115
Subcontract cost per unit $125
Inventory holding cost per unit per month $3
Assume that backorders are not permitted.
Required:
1. Using the transportation method, the total cost of the optimal plan is $ (enter your response as a whole number).

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?