Current Designs faces a number of important decisions that require incremental analysis. Recently, James Smith, owner and CEO of Current Designs, received a phone call from the president of a brewing company. He was calling to inquire about the possibility of Current Designs producing "floating coolers" for a promotion his company was planning. These coolers resemble a kayak but are about one-third the size. They are used to float food and beverages while paddling down the river on a weekend leisure trip. The company would be interested in purchasing 70 coolers for the upcoming summer. It is willing to pay $245 per cooler. The brewing company would pick up the coolers upon completion of the order. James met with Mary Johnson, controller, to identify how much it would cost Current Designs to produce the coolers. After careful analysis, the following costs were identified.

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in a…