A. A product has a contribution margin ratio of 40% and selling price of $30 per unit. Fixed costs are $11,000. Assuming the company increases the selling price to $40 and doubles fixed costs, what is the breakeven point in units?

B. Setup costs for Weird Als two different accordion products: The Polka, and The Super amounted to $12,000. Each product has the same number of set-ups. Weird Al used 4,000 labor hours to product The Polka, and 2,000 labor hours to produce The Super. Weird Al currently applies all overhead based on direct labors hours. However, after taking BUAD 2050 Weird Al is considering switching to activity based costing. What is the impact? The Polka is _____________________(indicate under or over-costed) by $__________ under traditional costing. The Super is _____________________(indicate under or over-costed) by $__________ under traditional costing.

Show work:

C. Super Apple Inc. harvests apples, and then makes apple sauce and apple cider. The joint cost of harvesting apples is $400,000. Once the apples are cleaned, they can made into apple sauce and apple cider. From the harvest, 24,000 gallons of apple sauce and 16,000 gallons of apple cider can be produced. The apple sauce can be sold as-is for $2 per gallon or processed further for an additional $4 per gallon and sold as premium apple sauce for $10 per gallon. The apple cider can be sold as-is for $3.25 per gallon or processed further for an additional $1 per gallon and sold as premium apple cider for $6 per gallon.

1. How much joint costs will be assigned to each product (apple sauce and apple cider), if joint costs are allocated on the basis of gallons produced?

2. How much joint costs will be assigned to each product (apple sauce and apple cider), if joint costs are allocated on the basis of relative sales?

3. Mickey Enterprises has three department stores that have the following floor space:

Department 1	20,000 square feet
Department 2	30,000 square feet
Department 3	50,000 square feet

How much of the $1,000,000 store rent be allocated to each department?

E. Give three examples of direct costs that would incur in a paper airplane manufacturing department (what costs can be easily traced to this specific department?) 1._________________________________________________________________________ 2._________________________________________________________________________ 3._________________________________________________________________________