The Seattle Corporation manufactures filing cabinets in two operations: machiE (Click the icon to view the department information.)RequirementsEach cabinet sells for $105 and has direct material costs of $70 incurred at theThere is no connection between the requirements.1. Seattle is considering using some modern jigs and tools in the finishingoperation that would increase annual finishing output by 1,200 units. Theannual cost of these jigs and tools is $25,000. Should Seattle acquire thesetools? Show your calculations.2. The production manager of the Machining Department has submitted aproposal to do faster setups that would increase the annual capacity of theMachining Department by 13,500 units and would cost $32,000 per year.Should Seattle implement the change? Show your calculations.3. An outside contractor offers to do the finishing operation for 17,000 units at$10 per unit, double the $5 per unit that it costs Seattle to do the finishingin-house. Should Seattle accept the subcontractor's offer? Show yourRead the requirements.Requirement 1. Seattle is considering using some modern jigs and tools in thcalculations.Producing 1,200 more units will generatecontribution (throughput) macalculations.4. The Heaton Corporation offers to machine 6,800 units at $4 per unit, half theS8 per unit that it costs Seattle to do the machining in-house. Should Seattleaccept Heaton's offer? Show your calculations.5. Seattle produces 1,800 defective units at the machining operation. What isthe cost to Seattle of the defective items produced? Explain your answerbriefly.6. Seattle produces 1,800 defective units at the finishing operation. What is thecost to Seattle of the defective items produced? Explain your answer briefly.PrintDone The Seattle Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information:E (Click the icon to view the department information.)Each cabinet sells for $105 and has direct material costs of $70 incurred at the start of the machining operation. Seattle has no other variable costs. Seattle can sell whatever output it produces. The following requirements refer only to the preceding data.There is no connection between the requirements.Read the requirementsRequirement 1. Seattle is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $25,000. Should Seattle acquire these tools? Show yourcalculations.Producing 1,200 more units will generateV contribution (throughput) margin and operating income becauseData tableMachiningFinishingAnnual capacity150,000 units125.000 unitsAnnual production125,000 units125,000 units$1,000,000$625,000Fixed operating costs (excluding direct materials)Fixed operating costs per unit produced($1,000,000 + 125,000; $625,000 + 125,000)$8 per unit$5 per unitPrintDone

Operating income refers to the term which states the adjusted revenue of business after all the operation expenses as well as depreciation are deducted. And expenses of the operation states the costs which is incurred for keeping the business in running form. Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and specify the other subparts (up to 3) you’d like answered.Part 1: Seattle should acquire these tools as they increase the operating income by $17,000. Workings:Part 2: The department of machining has the excess capacity as well as it is not a bottleneck operation. And the department of finishing has the annual capacity of 125,000 units as the only constraint, By increasing the capacity further would not increase the contribution. Therefore, there is no advantage of spending $32,000 to increase the capacity of machining department by 13,500 units. So, the company should not require to execute the change in order to setup faster. Part 3: Seattle should contract with the outside contractor as its benefits a hight throughput contribution. Workings: