1. Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $350,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $150,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $250,000 and $300,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

	Support Departments		Production Departments
	Warehouse Department	Data Center Department	Music	Books
Budgeted costs	$350,000	$150,000	$125,000	$150,000
Budgeted warehouse-hours	NA	500	1,000	1,500
Number of computer hours	200	NA	800	1,000

Using the direct method, what amount of Data Center Department costs will be allocated to Department Music?

A) $150,000

B) $66,667

C) $83,333

D) $60,000

2. Using the step-down method, what amount of Warehouse Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)

A) $233,333

B) $116,667

C) $243,333

D) $121,667

1. Hawkeye Cleaners has been considering the purchase of an industrial dry-cleaning machine. The existing machine is operable for three more years and will have a zero disposal price. If the machine is disposed now, it will be sold for $120,000. The new machine will cost $400,000 and an additional cash investment in working capital of $120,000 will be required at day of purchase.

The new machine will reduce the average amount of time required to wash clothing and will decrease labor costs. The investment is expected to net $100,000 in additional cash inflows during the year of acquisition and $300,000 each additional year of use. The new machine has a three-year life, and zero disposal value. These cash flows will generally occur throughout the year and are recognized at the end of each year.

What is the net present value of the investment, assuming the required rate of return is 10%? Would the company want to purchase the new machine?

A) $164,000; yes

B) $100,000; no

C) $(100,000); yes

D) $(164,000); no

2. Assume your goal in life is to retire with two million dollars. What is the equivalent of $2,000,000 in todays term assuming a rate of 6% and and a 20-year work life?

A) $29,130

B) $54,369

C) $240,204

D) $624,000

1. Sherfield Company uses a normal costing system, applying overhead using a single plant-wide rate. At the beginning of the year, budgeted (estimated) manufacturing overhead costs totaled $400,000, budgeted direct labor hours totaled 80,000 hours and budgeted machine hours totaled 20,000 hours. At the end of the year, the actual overhead costs recorded totaled $450,000 and actual direct labor hours were 86,000. The Sherfield Companys production process is very labor-intensive and therefore uses direct labor hours as the activity base. With this information, what is the assigned (applied) amount of MOH that Sherfield Company assign to production?

A. $430,000

B. $450,000

C. $400,000

D. $483,750

1. The WISCO Company uses a weighted-average process costing system. The following data are available: Beg inventory 0

Units started in production 20,000

Units finished during period 16,000

Units in process at end of period (complete as to materials, 1/4 complete as to labor and overhead) 4,000

Cost of materials used $35,200

Labor and overhead costs $37,400

Total cost assigned to the 16,000 units completed and finished is (Please round cost per equivalent unit to two decimals). A. $61,440. B. $67,320. C. $72,640. D. $65,120.

2. Kimbeth Manufacturing uses process costing to control costs in the manufacture of Dust Sensors for the mining industry. The following information pertains to operations for November. Work in process, November 1st 16,000 units

started in production during November 100,000 units

Work in process, November 30th 24,000 units The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs. The ending inventory was 90% complete as to materials and 40% complete as to conversion costs.

Costs pertaining to November are as follows: Beginning inventory: direct materials, $54,560; direct labor, $20,320; manufacturing overhead, $15,240

Costs incurred during the month: direct materials, $468,000; direct labor, $182,880; manufacturing overhead, $391,160

What are the total costs assigned to Ending Work-in-Process Inventory (uncompleted units) assuming Kimbeth uses first-in, first-out (FIFO) process costing? Please round cost per equivalent units to two decimals.

A. $153,168 B. $154,800 C. $155,328 D. $156,960 E. $159,648