1. You and your roommate would like to purchase a smsrt TV for your apartment. You have gathered the following information about the two leading models:

Factors	Xenabox 1000	BigScreen 1050
Screen size	50 inch	50 inch
Picture Quality	great	good
Cost	$1300	$1200
Delivery Charge	$50	$50

You paid $750 for your current TV two years ago.

Required:

a.	Which of the four factors listed above are relevant to your decision?
b.	Is the cost of your old TV relevant to your decision? Why or why not?
c.	Which of the factors are quantitative and which are qualitative?

2. Identify with a "X" the following costs as either a manufacturing (product) or nonmanufacturing (period) cost. If it is a manufacturing cost, further identify it as either direct material (DM), direct labor (DL), or overhead (OH).

		Manufacturing Cost						Nonmanufacturing Cost
			DM	DL	OH
Indirect labor
Factory supplies
Material easily traced to product
Administrative salaries
Factory rent
Indirect materials
Shipping costs
Administrative building utilities
Factory equipment depreciation
Machine operator

3. Capital Manufacturing produces a unique souvenir product for various museums around the country. During the year, the company incurred the following costs:

Direct material used	$50,000
Direct labor	80,000
Manufacturing overhead	30,000
Marketing expenses	10,000
Administrative expenses	20,000

During the year, 25,000 units were produced out of which 20,000 units were sold for $15 each.

Required:

A. Calculate the total product costs incurred for the year.

B. What is the product cost per unit?

C. What is cost of goods sold for the year?

D. What is net income for the year?

4. McClintock Manufacturing Inc. has the following information available for the month of July:

	Beginning		Ending
Raw materials inventory	$ 12,000		$ 8,000
Work-in-process inventory	45,000		55,000
Finished goods inventory	9,000		11,000
Raw materials purchased			$ 45,000
Direct labor costs			80,000
Overhead costs			30,000
Selling and administrative costs			20,000

Required:

A. Calculate raw materials used for July.

B. Calculate cost of goods manufactured for July.

C. Calculate cost of goods sold for July

D. Assume that sales revenue totaled $250,000, calculate net income for July. (ignore taxes)