9.

Huddleston Corporation is considering the following six long-term projects:

	Net Present Value			Investment Required
Project 1	$	28,272		$	18,600
Project 2	$	25,885		$	16,700
Project 3	$	23,660		$	16,900
Project 4	$	25,058		$	13,400
Project 5	$	28,998		$	16,200
Project 6	$	30,895		$	16,700

Only $63,000 is available for investment in these projects.

Required:

a-1.	Calculate the profitability index: (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Segment	Profitability Index
Project 1	$
Project 2	$
Project 3	$
Project 4	$
Project 5	$
Project 6	$

a-2.

Determine which projects should be accepted. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

	Project 1
	Project 2
	Project 3
	Project 4
	Project 5
	Project 6

b.	Determine the total net present value of all of the accepted projects if your plan from part (a-2) above is adopted. (Omit the "$" sign in your response.)

Net Present Value

$

15.

Balthazar Clinic uses the direct method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Support, and two operating departments, Prenatal and Pediatrics.

	Service Department		Operating Department
	Personnel	Support	Prenatal	Pediatrics
Departmental costs	$ 24,070	$ 41,850	$ 109,640	$ 298,780
Employee hours	3,000	1,000	16,000	13,000
Space occupied	7,000	2,000	32,000	4,000

Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. The total Pediatrics Department cost after the allocations of service department costs is closest to: (Round your intermediate answer to 5 decimal places and final answer to nearest whole dollar.)

$303,430

$307,694

$307,421

$314,220

16.

Bankert Corporation uses the step-down method to allocate service department costs to operating departments. The company has two service departments, General Management and Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow:

	Service Department		Operating Department
	General Management	Physical Plant	Sales	After-Sales
Departmental costs	$17,050	$61,725	$232,720	$291,400
Employee time	9,000	6,000	34,000	22,000
Space occupied	13,000	6,000	34,000	17,000

16.

General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied. The total After-Sales Department cost after allocations is closest to: (Do not round intermediate calculations.)

$312,525

$318,575

$315,929

$318,711

21.

The management of Kezar Corporation is reviewing its policies concerning compensation of salespersons. The company has four products that use the same constrained resource. Data concerning those products appear below:

	S100		S200		S300		S400
Unit selling price	$	42.60	$	25.50	$	18.00	$	41.90
Unit variable cost	$	23.00	$	16.80	$	12.40	$	33.40
Amount of the constrained resource required		.38		.36		.24		.50

The company does not have enough of the constrained resource to satisfy for demand of all four products.

Required:

a.

If salespersons are paid commissions that are a set percentage of sales, which product would they prefer to sell? In other words, if it is a choice between selling one unit of one product and one unit of another, which product would they prefer to sell?

	S400
	S200
	S300
	S100

b-1.	Calculate the profitability index. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Product	Profitability Index
S100	$
S200	$
S300	$
S400	$

b-2.

From the standpoint of the entire company, if it is a choice between sales of one unit of one product versus another, which product should the salespersons emphasize?

	S100
	S200
	S300
	S400

22.

Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order costing system and applies overhead to jobs on the basis of direct labor-hours. For the current year, Quark estimated that it would work 52,000 direct labor-hours and incur $12,792,000 of manufacturing overhead cost. The following summarized information relates to January of the current year. The raw materials purchased include both direct and indirect materials.

Raw materials purchased on account	$	903,000
Direct materials requisitioned into production	$	831,400
Indirect materials requisitioned into production	$	63,100
Direct labor cost (5,000 hours @ $34 per hour)	$	170,000
Indirect labor cost (5,600 hours @ $21 per hour)	$	117,600
Depreciation on the factory building	$	137,300
Depreciation on the factory equipment	$	642,000
Utilities for the factory	$	57,700
Cost of jobs finished	$	1,808,400
Cost of jobs sold	$	1,725,900
Sales (all on account)	$	2,589,200

Required:

Prepare journal entries to record Quark's transactions for the month of January. Do not close out the manufacturing overhead account. (Omit $ sign in your response.)