1. Joint products A and B emerge from common processing that costs $118,000 and yields 4,000 units of Product A and 3,000 units of Product B. Product A can be sold for $300 per unit. Product B can be sold for $100 per unit. How much of the joint cost will be assigned to Product A if joint costs are allocated on the basis of relative sales values? (Do not round your intermediate calculations.)

$91,900

$89,400

$94,400

$84,400

2.

Trail Power has been using the same machines to make its name brand clothing for the last 5 years. A cost efficiency consultant has suggested that production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the company $390,000. The old machines presently have a book value of $139,000 and a market value of $31,000. They are expected to have a 5 year remaining life and zero salvage value. The new machines would cost the company $290,000 and have operating expenses of $19,000 a year. The new machines are expected to have a 5 year useful life and no salvage value. The operating expenses associated with the old machines are $49,000 a year. The new machines are expected to increase quality, justifying a price increase, and thereby increasing sales revenue by $29,000 a year. Select the true statement.

The company will be $31,000 better off over the 5 year period if it replaces the old equipment.

The company will be $78,000 better off over the 5 year period if it keeps the old equipment.

The company will be $36,000 better off over the 5 year period if it replaces the old equipment.

The company will be $47,000 better off over the 5 year period if it keeps the old equipment.

3.

Scott Tools produces a variety of scissors and other cutting instruments at its Statesboro manufacturing plant. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to its various product lines. The company expects to produce 18,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below:

ACTIVITIES:	UNIT	BATCH	PRODUCT	FACILITY
	LEVEL	LEVEL	LEVEL	LEVEL
Cost	$37,500	?	$11,000	$216,000
Cost Driver	3,000 labor hrs	120 set ups	% of use	18,000 units

Production of 1,000 units of a pipe-cutting tool required 600 labor hours, 16 setups, and consumed 30 % of the product sustaining activities and resulted in an overhead allocation of $25,600. What amount of batch-level overhead costs was expected during the period? (Do not round intermediate calculations.)

$2,800

$21,000

$22,800

None of these answers is correct.