1. The following cost data pertain to the operations of Rademaker Department Stores, Inc., for the month of March.

Corporate headquarters building lease	$87,100
Cosmetics Department sales commissions--Northridge Store	$5,830
Corporate legal office salaries	$63,700
Store manager's salary-Northridge Store	$10,400
Heating-Northridge Store	$15,200
Cosmetics Department cost of sales--Northridge Store	$33,400
Central warehouse lease cost	$12,500
Store security-Northridge Store	$22,600
Cosmetics Department manager's salary--Northridge Store	$4,340

The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores.

What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?

$33,400

$43,570

$98,210

$39,230

2.

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:

Activities	Activity Rate
Setting up batches	$80.00		per batch
Processing customer orders	$71.73		per customer order
Assembling products	$7.31		per assembly hour

Data concerning two products appear below:

	Product V09X	Product A09X
Number of batches	70	13
Number of customer orders	21	10
Number of assembly hours	493	698

How much overhead cost would be assigned to Product V09X using the activity-based costing system?

$159.04

$107,101.60

$10,710.16

$5,600.00

3. Jeanlouis, Inc., manufactures and sells two products: Product D0 and Product D5. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated	Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost	Product D0	Product D5	Total
Labor-related	DLHs	$313,743	3,600	3,300	6,900
Production orders	orders	70,264	300	500	800
General factory	MHs	253,555	4,300	4,200	8,500
		$637,562

The total overhead applied to Product D5 under activity-based costing is closest to:

$319,252

$125,286

$304,920

$273,240

4.

Dybala Corporation's produces and sells a single product. Data concerning that product appear below:

	Per Unit	Percent of Sales
Selling price	$150	100%
Variable expenses	60	40%
Contribution margin	$ 90	60%

The company is currently selling 5,900 units per month. Fixed expenses are $474,700 per month. The marketing manager believes that a $6,900 increase in the monthly advertising budget would result in a 100 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

Decrease of $2,100

Increase of $9,000

Decrease of $6,900

Increase of $2,100