1. A company has the following activities along with their associated costs:

Activity	Estimated Overhead Cost
Maching (machine hours)	$300,000
Machine setups (# of setups)	$150,000
Product design	$80,000

Expected usage of resources by the company's only two products is the same as actual usage and appears below:

	Product X	Product Y
Machine hours	9,000	6,000
# of setups	50	150
Product Design	1	1

Using an activity-based costing system, what amount of costs will be allocated to Product X?

		$272,500
		$332,500
		$297,500
		$257,500

2. A company's estimated required production in units for June and July are 47,000 and 48,000, respectively. More details about production are provided in the table below:

Pounds of raw material required per finished unit	2
Percengage of raw materials remaining on hand	20% of the next month's production needs (this was aslo the estimate used in May)
Cost per pound of raw material	$2.95

What is the estimated cost of raw material purchases for June?

		$320,370
		$278,480
		$276,120
		$278,100

3. A company makes a product and sells it for $48/unit. The costs to make the product are $18 for direct materials, $12 for direct labor, and $10 for manufacturing overhead for a total cost of $40/unit. Of the manufacturing overhead, $3/unit is variable while the remainder is fixed and is constant within the relevant range.

A customer would like to buy 300 units of a special version of the item for $39/unit. Enough capacity exists to fulfill the order without reducing normal production. The special version would cost $3/unit more in direct materials and a special manufacturing tool costing $490 would also be needed. That tool would have no other purpose following the production of the special order. This order will have no impact on future sales to this or any other customer.

Should the special order be accepted?

		No, the financial disadvantage of doing so is -$410.
		Yes, the financial advantage of doing so is $900.
		Yes, the financial advantage of doing so is $410.
		Yes, the financial advantage of doing so is $1,310.