1.)CVP / Breakeven: Santa has decided to sell autographed pictures of hisself this summer so he can have a little spare cash to spend on Mrs. Claus and maybe some of the good other little elfies. It is going to cost him $48,000 to buy framing equipment, plus he has to pay a one time licensing fee of $10,000 to Frosty Da Snowman for protection. Each frame will cost $2 for the glass, $6 for the framing material, $1 for the backing, and $3 for the other materials. On the off-season Santa pays the elfs $25 per hour. They make 5 frames an hour. Santa figures hell sell the autographed pictures for a whopping $37 each.

Mrs. Claus thinks he has been eating too many cookies and should forget the whole deal. But good ol Santa says Hey honeycakes, dont worry about it all I have to do is sell _________of these pictures and we make back all the investment. Then he says in fact, if we sell _________ pictures we will have made $24,000.

Required: What are the numbers for the blanks above? (Breakeven number of frames to sell and the number to sell to make $24,000.)

SHOW IN DETAIL HOW YOU GOT THE FIGURES .

2.)High / Low Cost Estimating: Bing-Bang-Boozle Inc. makes plastic beer cups for tailgating, nice fan decals and all that. They had the following overhead costs:

	Machine Hours	Overhead Cost
January	100	5400
February	160	7200
March	250	9900
April	110	5700
May	180	7800
June	150	6900
July	120	6000

1. Using the High-Low method calculate the variable cost per unit and fixed costs.

2. If the activity in August was 200 machine hours, what would the high-low method predict the overhead cost would be?