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(1) BumpyRide Inc, manufactures commercial and residential riding lawnmowers. The com- pany sells one commercial mower per four residential mowers sold. Selling prices for the
(1) BumpyRide Inc, manufactures commercial and residential riding lawnmowers. The com- pany sells one commercial mower per four residential mowers sold. Selling prices for the com- mercial and residential mowers are, respectively, $700 and $300. The variable selling and produc- tion costs are, respectively, S524 and $219. The company's annual fixed cost is $10,000. If the company's tax rate is 40% and it wants to earn $3,000 of income after tax next year, 1A) What are the target sales (in dollars)? 1B) What is the margin of safety in sales dollars? Show all your work in the Excel sheet below. Write your final answers in the Tab marked "COVER PAGE". Q2) Gotham Inc. has a total of $50,000 in production overhead costs. The company's products and related statistics follow. Direct Material in Pounds Direct labor hours Machine Hours Number of setups Number of Units Produced Product X 2.400 320 720 54 312 Product Y 1,600 480 280 96 140 Additional data: The direct material was purchased for $8,000. One direct labor hour costs $20. 2A) Assume that Gotham uses direct labor hours to apply the overhead costs to the products. Determine the unit cost for product X? 2B) Assume that Gotham uses the following activity centers, cost drivers, and costs to apply overhead to products. Cost Pool Utilities Setup Material Handling Cost Driver # of machine hours # of setups # of pounds of material Overhead Cost $15,500 $9.500 $25,000 Determine the unit cost for product Y? Show all your work in the excel sheet below. Write your final answer for each section in the cor- responding space in the Tab marked "COVER PAGE
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