Requirements: Read the Blackheath Case on pages 5-8 of your case book. This tab contains the seven questions you are to answer to complete the assignment. There are several more tabs to the right. The red tabs are for answering the seven questions that are written here (notice that they are labeled 1 through 7. Every case is set up the same way to improve understanding and develop a patterned approached to learning. For convenience, the questions are repeated throughout the assignment on the red tabs that follow. Please reach out if you have any questions regarding the process or need help getting started. Please rename the file. For Individual Files (Last & First Name, Case Name). For Group Files (Group #, Case Na Shape, Text Box COMPLETE THE PINK CELLS ONLY! 1. Briefly describe the situation. 2. Create the scattergraphs for the various costs of manufacturing. Create a cost equation. 2A. Recreate the data Lee High created to arrive at the $6.60 unit cost. 2B. Recreate the income statements for week 1, 2 and 3. Create contribution income statements and interpret similarities and difference between the two reports. Assess the change in week 1 by increasing volume 50 units. 3. Calculate break-even in units. Explain why week 1 net income was negative given what you calculated for break-even point in units and sales dollars. 4. Calculate the break-even price (FC/volume + variable cost per unit) and the target price (10% above delivery costs or break-even price) at 400, 500 and 600. Use cell referencing to build the formulas. Create a single scatter graph with a trend line for the break-even price and the target price points. Interpret the prices. 5.1 Evaluate the first order on page 7 of the case: The sales representative sold 450 units at $7 per unit. Did they achieve break-even point? How much did the order contribute to covering fixed costs? Was it a good decision? 5.2 Evaluate the second order on page 7 of the case: The sales representative turned down a request from an irregular customer for 50 units at $6.50 per units because of the $7 rule. Was this a good decision? Why are fixed costs not included (not relevant to the decision)? 5.3 Evaluate the third order on page 7 of the case (this was actually 2 orders): One telephone order was accepted for $6.50 per unit for 80 units, but another was rejected at $5.75 per unit for 50 units because of the $6.49 rule. Evaluate each order separately. These orders do NOT have a commission associated with them (no sales representative). Was this a good decision? Why are fixed costs not included (not relevant to the decision)? 5.4 Evaluate the fourth order on page 7 of the case: Ms. Adelaide Ladywell received an order from 100 units at $5.50. This order does NOT have a commission associated with it (not a sales representative). Was this a good decision? Why are fixed costs not included (not relevant to the decision)? 6. Evaluate the logic that it is better to sell 350 units at $8.00 per unit than the 450 at $7.00 per unit and the offer to pay a higher commission. Do you agree with this decision? Support your recommendation with data from the table and apply the general decision rules for special orders. Also, evaluate the behaviors that might occur given the commission policy. What's likely to happen? 7. Summarize the key learnings from this case (bullet form is fine). Develop a new pricing decision rule for the company and explain why the old rule was flawed.

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