1. Sheffield reported the following results from the sale of 5000 units in May: sales $480000, variable costs $360000, fixed costs $90000, and net income $30000. Assume that Sheffield increases the selling price by 5% on June 1. How many units will have to be sold in June to maintain the same level of net income?

a. 5000.

b. 4792.

c. 4750.

d. 4167.

2. Gant Accounting performs two types of services, Audit, and Tax. Gants overhead costs consist of computer support, $273000; and legal support, $136500. Information on the two services is:

	Audit	Tax
Direct labor cost	$50000	$100000
CPU minutes	40000	10000
Legal hours used	200	800

Overhead applied to tax services using traditional costing is

a. $273000.

b. $245700.

c. $163800.

d. $136500.

3. Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynosos total overhead costs consist of assembly costs and inspection costs. The following information is available:

Cost	Titanium	Aluminum	Total Cost
Assembly	500 mach. hours	500 mach. hours	$56000
Inspections	350	150	$96000
	2100 labor hours	1900 labor hours

Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much assembly cost is assigned to titanium racquets?

a. $28000.

b. $21000.

c. $29400.

d. $39200.