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1. Serene Dairy has four product lines: sour cream, ice cream, yogurt, and butter. The total cost of producing the milk base for the products

1. Serene Dairy has four product lines: sour cream, ice cream, yogurt, and butter. The total cost of producing the milk base for the products is $45,000, which has been allocated based on the gallons of milk base used by each product. Results for July follow:

Sour Cream

Ice Cream

Yogurt

Butter

Total

Units sold

2,000

500

400

2,000

4,900

Revenue

$10,000

$20,000

$10,000

$20,000

$60,000

Variable departmental costs

6,000

13,000

4,200

4,800

28,000

Fixed costs

5,000

2,000

3,000

7,000

17,000

Net income (loss)

$(1,000)

$5,000

$2,800

$8,200

$15,000

How much are total joint costs of the products

2._Hi-Tech Inc. has several outdated computers that cost a total of $17,800 and could be sold as scrap for $4,600. They could be updated for an additional $2,400 and sold. If Hi-Tech updates the computers and sells them, net income will increase by $9,000. At what price were the updated versions sold?

3._An important step in management's decision-making process is to determine and evaluate possible courses of action.

4._ If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period, overhead is said to be?

5._ Value-added activities

Increase the perceived worth of a product or service to customers

Involve those activities that are essential to a companys operations

Include engineering design machining and assembly

Or all of these?

6._ Pascal, Inc. is planning to sell 800,000 units for $1.50 per unit. The contribution margin ratio is 20%. If Pascal will break even at this level of sales, what are the fixed costs?

7._ The Lumber Division of Paul Bunyon Homes Inc. produces and sells lumber that can be sold to outside customers or within the company to the Construction Division. The following data have been gathered for the coming period:

Lumber Division:

Capacity

200,000 board feet

Price per board foot

$2.50

Variable production cost per bd. ft.

$1.25

Variable selling cost per bd. ft.

$0.50

Construction Division:

Board feet needed

60,000

Outside price paid per bd. ft.

$2.00

If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs. If the Lumber Division has sufficient excess capacity to fulfill the Construction Division

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