A dairy allocates the cost of unprocessed milk to the production of milk, cream, butter and cheese. For the current period, unprocessed milk was purchased for $528,000, and the following quantities of product and sales revenues were produced.

Product	Pounds	Price per pound
Milk	420,000	$0.90
Cheese	210,000	2.10
Butter	84,000	1.00
Cream	42,000	3.00

How much of the $528,000 cost should be allocated to milk?

	$528,000
	$226,286
	$193,959
	$0
	$43,102

Midwest Rocks receives and produces an order. What is the company's cycle time assuming the following times were measured during production of this order?

Process time: 2.2 days Inspection time: 1.00 days Move time: 12.30 days Wait time: 1.25 days

3.20 days

15.50 days

14.55 days

2.20 days

16.80 days

Bookman Company has three operating departments: Department A, Department B, and Department C. Administrative costs are allocated to operating departments based on the number of workers and maintenance costs are allocated to operating departments based on square footage occupied.

	Department A	Department B	Department C
Number of employees	4,200 employees	7,800 employees	10,500 employees
Square feet occupied	60,000 Sq.ft.	82,000 Sq.ft.	45,000 Sq.ft.

Assume that Bookman allocated $38,500 maintenance costs to Department C. Based on the above data, determine maintenance costs allocated to Department A.

$38,500

$96,500

$51,333

$540,000

$159,989

Assume that Charlie's Brownies expects to produce and sell 4,000 units of a single product, a gift box containing an assortment of brownies that showcases the company's many flavors. The following additional company information is available:

Variable costs (per unit)
Production costs	$14
Nonproduction costs	$2
Fixed costs (in total)
Overhead	$100,000
Nonproduction	$4,000

Compute Charlie's Brownies total cost per unit.

	$3.00
	$39.00
	$26.00
	$16.00
	$42.00

Paz Inc. manufactures a product that contains a small motor. The company has always purchased this motor from a supplier for $38 each. Paz recently upgraded its own manufacturing capabilities and now has enough excess capacity (including trained workers) to begin manufacturing the motor instead of buying it. The company prepared the following per unit cost projections of making the motor, assuming that overhead is allocated to the part at the normal predetermined overhead rate of 125% of direct labor cost.

Direct materials	$13.0
Direct labor	15.2
Overhead (fixed and variable)	19.0
Total	$47.2

The required volume of output to produce the motors will not require any incremental fixed overhead. Incremental variable overhead cost is $15.2 per motor. What is the effect on income if Paz decides to make the motors?

	Income will decrease by $5.4 per unit.
	Income will increase by $5.4 per unit.
	Income will increase by $9.2 per unit.
	Income will decrease by $9.2 per unit.
	Income will increase by $9.8 per unit.