1. A company uses activity-based costing to determine the costs of its three products: A, B and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:

Activity Cost Pool Budgeted Cost Product A Product B Product C

Activity 1 $270,750 11,500 14,500 31,000

Activity 2 $221,000 12,500 26,000 13,500

Activity 3 $157,500 3,600 2,100 2,700

How much overhead will be assigned to Product B using activity-based costing?

$218,750

$255,250

$175,250

$649,250

$270750

2. A company's product sells at $40 per unit and has a $18 per unit variable cost. The company's total fixed costs are $258,500.

The break-even point in units is:

4,169

6,463

11,750

5,875

14,361

3. Under absorption costing, a company had the following unit costs when 12,000 units were produced.

Direct labor $ 10.50 per unit

Direct material $ 11.00 per unit

Variable overhead $ 8.75 per unit

Fixed overhead ($138,000 / 12,000 units) $ 11.50 per unit

Total production cost $ 41.75 per unit

Compute the total production cost per unit under variable costing if 46,000 units had been produced.

$30.25

$41.75

$32.25

$21.50

$33.25

4. Bentels Co. desires a December 31 ending inventory of 2,840 units. Budgeted sales for December are 4,900 units. The November 30 inventory was 2,205 units. Budgeted purchases are:

5,535 units

635 units

7,740 units

4,900 units

7,105 units

5. Use the following data to find the direct labor rate variance.

Direct labor standard (4.5 hrs.@ $ 6/hr.) $27 per finished unit

Actual hours worked per unit 4.0 hours

Actual units produced 4,000 units

Actual rate per hour 6.25 per hour

$16,000 favorable.

$16,000 favorable.

$16,000 unfavorable.

$4,000 favorable.

$4,000 unfavorable.

6. If a manager were concerned with the time value of money, from which two capital budgeting methods should the manager choose?

IRR or Payback.

BET or IRR.

BET or Payback.

NPV or ARR.

NPV or Payback

7. Marsden manufactures a cat food product called Special Export. Marsden currently has 17,000 bags of Special Export on hand. The variable production costs per bag are $1.9 and total fixed costs are $17,000. The cat food can be sold as it is for $9.1 per bag or be processed further into Prime Cat Food and Feline Surprise at an additional $3,300 cost. The additional processing will yield 17,000 bags of Prime Cat Food and 4,950 bags of Feline Surprise, which can be sold for $8.1 and $6.1 per bag, respectively.

The net advantage (incremental income) of processing Special Export further into Prime and Feline Surprise would be:

$13,195

$3,300

$164,595

$9,895

$167,895

8. General Chemical produced 37,500 gallons of Greon and 75,000 gallons of Baron. Joint costs incurred in producing the two products totaled $24,000. At the split-off point, Greon has a market value of $6 per gallon and Baron $2 per gallon. What portion of the joint costs should be allocated to Greon if the basis is market value at point of separation?

$9,600

$14,400

$8,000

$16,000

$4,800