1.

Selected operating information on three different companies for a recent year is shown below: Company A B C Fullcapacity MHs 15,000 27,000 30,000 Budgeted MHs* 12,500 25,000 30,000 Actual MHs 12,500 26,000 28,000 Standard MHs allowed for actual production 13,000 23,000 30,000 *Denominator activity level for computing the predetermined overhead rate Required: For each company, state whether the company would have a favourable or unfavourable volume variance. (Select "None" if no volume variance apply for a particular company.) Company A Company C Bikes Manufacturing produces and sells children's bikes at an average price of $120. Its costs are as follows: direct materials, $12; direct labour, $6; variable overhead, $4; sales commission, 5% of price. Its xed monthly costs are $54,000. Required: 1. Using the above cost data, set up a monthly cost equation. -:-:- 2. What is the company's contribution margin percentage? (Round your answer to 2 decimal places.) Han Products manufactures 50,000 units of part 8-6 each year for use on its production line. At this level of activity, the cost per unit for part 8-6 is as follows: Direct materials $ 5.50 Direct labour 11.50 Variable overhead 4.50 Fixed overhead 10.20 Total cost per part $31.70 An outside supplier has offered to sell 50,000 units of part 8-6 each year to Han Products for $28.00 per part. If Han Products accepts this offer, the facilities now being used to manufacture part 8-6 could be rented to another company at an annual rental of $100,000. However, Han Products has determined that two-thirds of the xed overhead being applied to part 8-6 would continue even if part 8-6 were purchased from the outside supplier. Required: What is the net dollar advantage or disadvantage of accepting the outside supplier's offer? (Do not round intermediate calculations} :ZI