Caprice Company manufactures and sells two products-a small portable office file cabinet that it has made for

Question:

Caprice Company manufactures and sells two products-a small portable office file cabinet that it has made for over 15 years and a home/travel file introduced recently. The files are made in Caprice's only manufacturing plant. Budgeted variable production costs per unit of product are as follows: image text in transcribed

Variable manufacturing overhead costs vary with direct labor hours. The annual fixed manufacturing overhead costs are budgeted at $\$ 120,000$. A total of $50 \%$ of these costs are directly traceable to the office file department and $22 \%$ of the costs are traceable to the home/travel file department. The remaining $28 \%$ of the costs are not traceable to either department.
Caprice employs two full-time salespersons-Pam Price and Robert Flint. Each salesperson receives an annual salary of $\$ 14,000$ plus a sales commission of $10 \%$ of his/her total gross sales. Travel and entertainment expense is budgeted at $\$ 22,000$ annually for each salesperson. Price is expected to sell $60 \%$ of the budgeted unit sales for each file and Flint the remaining $40 \%$. Caprice's remaining selling and administrative expenses include fixed administrative costs of $\$ 80,000$ that cannot be traced to either file plus the following traceable selling expenses. image text in transcribed

at the same amounts as budgeted, and all variable manufacturing overhead costs were incurred at the budgeted hourly rates.
All selling and administrative expenses were incurred at budgeted rates or amounts except the following items. image text in transcribed