20Q Session 2A. Still typing the remaining questions...Thanks!..........

1. Maxx Inc. has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Designing Products $371,600 6,580 design hours Setting up Batches $52,678 7,366 batch set-ups Assembling Products $25,122 4,018 Assembly hours The activity rate for the \"designing products\" activity cost pool is? 2. Sasha Company allocates the estimated $198,000 of its accounting department cost to its production and sales departments since the accounting department supports the other two departments particularly with regard to payroll and accounts payable functions. The costs will be allocated based on the number of employees using the direct method. Information regarding costs and employees follows. Department Employees Accounting 4 Production 37 Sales 19 How much of the accounting department costs will be allocated to the production? 3. Medusa Company allocate costs from the payroll department (S1) and the maintenance department (S2) to the molding (P1), finishing (P2), and packaging (P3) departments. Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet which the production department occupies within the factory. Information about the departments is presented below. Number of Number of Department Costs Employees Square Feet Payroll (S1) $150,000 2 2,000 Maintenance (S2) $220,000 8 64,000 Molding (P1) 75 100,000 Finishing (P2) 44 60,000 Packaging (P3) 18 40,000 Medusa uses the direct method to allocate costs. Round all answers to the nearest dollar. What amount of the payroll department costs will be allocate to the molding department? 4. The Manassas Company has 55 obsolete keyboards that are carried in inventory at a cost of $9,600. If these keyboards are updated at a cost of $8,000, they could be sold for $19,900. Alternatively, the keyboards could be sold \"as is\" for $8,600. What is the net advantage or disadvantage of re-working the keyboards? 5. Ritz Company sells fine collectible statues and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs related to packaging and shipping and Rand has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected and shipped. The final cost pool is used for general operations and supervision of the department and the cost driver is the number of shipments. Information about the department is summarized below. Cost Pool Total Costs Cost Driver Annual Activity Packaging/Shipping $160,900 # Boxes shipped 24,200 Final Inspection 203,900 # Items Shipped 99,500 General Operations And Supervision $84,400 # Orders 9,100 During the period, the Far East sales office generated 671 orders for a total of 6,050 items. These orders were shipped in 1,326 boxes. What amount of shipping department costs should be allocated to these sales? 6. Baller Financial is a banking services company that offers many different types of checking accounts. The bank has recently adopted an activity-based costing system to assign costs to its various types of checking accounts. The following data relates to the money market checking accounts, one of the popular checking accounts, and the ABC cost pools: Cost Pool Cost Cost Drivers Returned Check Costs $2,720,000 # Returned Checks Checking Accounts Reconciliation Costs 51,000 New Account Setup 634,000 # New Accounts Copies Cancelled Checks 396,000 # Cancelled Checks Requests for Copies # Reconciliation Requests Website Maintenance 191,000 Per Product Group (Type of Account) Annual activity information related to cost drivers: Cost Pool All Product Money Market Checking Returned Check 191,000 Returned Checks 18,000 Reconciliation Costs 396,000 Checking Acc. 420 New Accounts 55,000 New Accounts 15,000 Cancelled Check Requests 95,000 cancelled checks 60,000 Web Site Costs 6 Types of Accounts 1 Calculate the overhead cost per account for the Money Market Checking. 7. Sosa Company has $39 per unit in variable costs and $1,900,000 per year in fixed costs. Demand is estimated to be 138,000 units annually. What is the price if a markup of 35% on total costs is used to determine the price? 8. Bob's Company sells one product with a variable cost of $5 per unit. The company is unsure what price to charge in order to maximize profits. The price charged will also affect the demand. If fixed costs are $100,000 and the following chart represents the demand at various prices, what price should be charged to maximize profits? Units Sold Price 30,000 40,000 50,000 60,000 $10 $9 $8 $7 a. b. c. d. $10 9 8 $7