1.

Lehner Corporation has provided the following data from its activity-based costing accounting system:

Indirect factory wages	$600,000
Factory equipment depreciation	$278,500

Distribution of Resource Consumption across Activity Cost Pools:

Activity Cost Pools

	Customer Orders	Product Processing	Other	Total
Indirect factory wages	45%	40%	15%	100%
Factory equipment depreciation	35%	55%	10%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.

How much indirect factory wages and factory equipment depreciation cost would NOT be assigned to products using the activity-based costing system?

a. $117,850

B. $0

C. $278,500

D. $600,000

2.

Super Sales Company is the exclusive distributor for a revolutionary bookbag. The product sells for $37 per unit and has a CM ratio of 30%. The companys fixed expenses are $244,200 per year. The company plans to sell 23,000 bookbags this year.

Required:

Use the equation method:

a.

What is the break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your answers to the nearest whole number. Omit the "$" sign in your response.)

b. What sales level in units and in sales dollars is required to earn an annual profit of $55,500? (Do not round intermediate calculations. Round your answers to the nearest whole number. Omit the "$" sign in your response.)

c.

Assume that through negotiation with the manufacturer the Super Sales Company is able to reduce its variable expenses by $3.60 per unit. What is the companys new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number. Omit the "$" sign in your response.)