4 . ( TCO 8 ) Sportswear Company manufactures socks . The Athletic Division sells its socks for $ 6 a pair to outsiders . Socks have manufacturing costs of $ 2.50 each for variable and $ 1.50 for fixed . The division ' s total fixed manufacturing costs are $ 105,000 at the normal volume of 70,000 units . The European Division has offered to buy 15,000 socks at the full cost of $ 4 . The Athletic Division has excess capacity and the 15,000 units can be produced without interfering with the current outside sales of 70,000 . The 85,000 volume is within the division ' s relevant operating range . Explain whether the Athletic Division should accept the offer . Support your decision showing all calculations . ( Points : 25 ) Question 1 . 1 . ( TCO 2 ) Russell Company has the following projected account balances for June 30 , 20X9 :….. Prepare a budgeted income statement AND a budgeted balance sheet as of June 30 , 20X9 . Russell Company Income Statement Question 2 . 2 . ( TCO 5 ) Steven ' s Medical Equipment Company manufactures hospital beds . Its most popular model , Deluxe , sells for $ 5,000 . It has variable costs totaling $ 2,800 and fixed costs of $ 1,000 per unit , based on an average production run of 5,000 units . It normally has four production runs a year , with $ 600,000 in setup costs each time . Plant capacity can handle up to six runs a year for a total of 30,000 beds . A competitor is introducing a new hospital bed similar ……..? ( Points : 25 ) Question 3 . 3 . ( TCO 7 ) Dulce Greeting Cards Incorporated is starting a new business venture and is in the process of evaluating its product lines . Information for one new product , traditional parchment grade cards , is as follows : ∙ For 16 times each year , a new card design will be put into production . Each new design will require $ 300 in setup costs . ∙ The parchment grade card product line incurred $ 75,000 in development costs and is expected to be produced over the next four years . …………… ( Points : 25 ) Question 4 . 4 . ( TCO 8 ) Novacar Company manufactures automobiles . The red car division sells its red cars for $ 25,000 each to the general public . The red cars have manufacturing costs of $ 12,500 each for