1.

In its first year of operations a company produced and sold 70,100 units of Product A at a selling price of $21 per unit and 17,600 units of Product B at a selling price of $41 per unit. Additional information relating to the companys only two products is shown below:

	Product A				Product B				Total
Direct materials	$	436,800			$	251,900			$	688,700
Direct labor	$	201,000			$	104,500				305,500
Manufacturing overhead										608,500
Cost of goods sold									$	1,602,700

The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows:

						Activity
Activity Cost Pool (and Activity Measure)	Manufacturing Overhead						Product A			Product B			Total
Machining (machine-hours)		$	213,600				90,500			62,600			153,100
Setups (setup hours)			157,600				76			310			386
Product design (number of products)			120,100				1			1			2
Other (organization-sustaining costs)			117,200				NA			NA			NA
Total manufacturing overhead cost		$	608,500

The companys ABC implementation team also concluded that $50,500 and $101,000 of the companys advertising expenses could be directly traced to Product A and Product B, respectively. The remainder of its selling and administrative expenses ($401,000) was organization-sustaining in nature. If the company uses a traditional cost system that relies on plantwide overhead allocation based on direct labor dollars, what is the total gross margin (or product margin) earned by Product A? (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

• $353,610

• $414,210

• $434,310

• $383,810

2.

Assume the following information:

					Percent Complete
Milling Department	Units				Materials					Conversion
Beginning work in process inventory		200				40	%				30	%
Units started into production during March		6,200
Units completed during the period and transferred to the next department		5,800				100	%				100	%
Ending work in process inventory		600				80	%				20	%

Milling Department	Materials				Conversion
Cost of beginning work in process inventory	$	10,000			$	15,000
Costs added during the period		290,000				383,000
Total cost	$	300,000			$	398,000

Using the weighted-average method, the total cost of ending work in process inventory reported on the cost reconciliation report is closest to:

Multiple Choice

• $34,327.

• $30,997.

• $32,237.

• $30,117.