1.Gynriostsehetl Company makes two types of beauty products Pure-Active and Premier-Active. Data concerning these two product lines appear below:

	Pure-Active	Premier-Active
Selling Price per unit	$100.00	$125.00
Direct Materials per Unit	$50.00	$70.00
Direct Labor per unit	$20.00	$35.00
Direct Labor Hours per unit	1.5 DLHs	2.0 DLHs
Estimated annual production and sales	40,000 units	100,000 units

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:

Estimated total manufacturing overhead	$2,600,000
Estimated total direct labor hours	??? DLHs

The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs):

Activities and Activity Measures	Estimated Overhead Cost	Expected Activity Pure-Active Premier-Active Total
Supporting direct labor (direct labor-hours)	$ 1,300,000	60,000	200,000	260,000
Batch setups (setups)	500,000	400	100	500
Product sustaining (number of products)	600,000	1	1	2
Other	200,000	NA	NA	NA
Total Manufacturing overhead cost	$ 2,600,000

REQUIRED:

a. Compute the product margins for Pure-Active and Premier-Active products under the companys traditional costing system

b. Compute the product margins for Pure-Active and Premier-Active products under the activity-based costing system

2. Barberry, Inc., uses a standard cost system for its product, Fruta, and has established the following standards for one unit of Fruta:

	Standard Quantity (Hours)	Standard Price or Rate
Direct materials	A	B
Direct labor	C	D
Variable manufacturing overhead	E	$ 2.50 per hour

During June, the company produced 6,000 units of Fruta using 9,900 pounds of direct materials. A total of X pounds of material were purchased at a cost of $81,000.There were 1,900 pounds of material in beginning inventory and at the end of the month, 1,000 pounds of material remained in ending inventory. The company employs 10 persons to work on the production of Fruta. During June, they worked an average of 200 hours each and the total actual labor cost for all 10 employees was $40,000. Variable manufacturing overhead is assigned to Fruta on the basis of direct labor-hours. Variable manufacturing overhead costs during June totaled $14,400.

The Material and Labor Variances were computed as follows

VARIANCE	AMOUNT	NATURE
Material Quantity Variance	$ 21,000	Favorable
Material Price Variance	$ 9,000	Favorable
Labor Efficiency Variance	$ 7,200	Favorable
Labor Rate Variance	$ 4,000	Unfavorable

REQUIRED:

Compute the Standard Quantity per unit (A) and Standard Price per unit (B) for Direct Materials.

Compute the Standard Hours per unit (C) and Standard Rate per hour (D) for Direct Labor.

Compute the Variable Overhead Rate and Efficiency Variances. (6 points). Hint: C = E