1.

Chipotle is deciding whether to continue making guacamole in the restaurant or buy it from an outside supplier. Chipotle's cost information is as follows (unit is a tub full of guacamole):

	Cost per Unit
Direct Materials	$9.78
Direct Labor	$4.14
Variable Overhead	$2.41
Worker Salary	$6.59
Depreciation of Avocado Peeler	$1.09
Allocated General Overhead	$1.29

Assume the avocado peeler has a salvage value of $0 and cannot be used for any other purpose. Assume all direct labor is variable and the worker can be terminated.

What is the total per unit relevant cost of producing guacamole that Chipotle should consider in its decision?

Round your answer to the nearest cent.

1.

Appel Inc. has two product lines: phones and laptops. They are considering dropping the phone segment to improve their net operating income. Data for each per unit is as follows:

	Phones	Laptops
Revenue	$530	$1099
Variable Costs	$245	$430
Traceable Fixed Costs	$300	$209
Allocated Fixed Costs	$110	$130
Total Per Unit	$(125)	$330

Assume no allocated fixed costs are avoidable if the phone segment is dropped, but 100% of traceable fixed costs can be avoided.

If Appel Inc. sells 1,824 units of phones and 555 units of laptops, how much will their net operating income increase/decrease if the phone segment is dropped?

Round your answer to the nearest dollar.