11. Einstein/Noah Bagel bakery led for bankruptcy citing excessive overhead in their 440 bagel stores. Assume Einstein allocated overhead to their various stores based upon direct labor hours. Allocating overhead based upon an Activity-Based-Costing system would have a. improved the protability of the overall rm b. allowed Einstein to better determine which stores are protable and which are not c. changed the contribution margin of the overall rm d. none of the above Sam's Toy Factory produces a small toy wagon. Sam's results for the year are as follows: Wagons sold = 36,000 Wagons produced = 48,000 Sales price per wagon = $20 Beginning inventories = 0 Direct material cost per wagon = $5 Variable manufacturing cost (labor and overhead) per wagon = $3 Variable selling and administrative cost per wagon = $2 Total xed costs per year = $120,000 (including both xed manufacturing overhead and S&A costs) Total xed manufacturing overhead costs = $96,000. 12. Sam's net income before taxes based on variable costing is a. 216,000 b. 240,000 c. 256,000 d. 264,000 e. some other amount. 13. Sam's net income before taxes based on absorption costing is a. 216,000 b. 240,000 c. 256,000 d. 264,000 e. some other amount