A. During its first year of operations, Nickelback Company paid $10,000 for direct material, $10,000 in wages for production workers, and $30,000 wages for administrative and sales personnel. Lease payments and utilities on the administrative building and production facilities amounted to $5,000 and $6,000, respectively. General, selling, and administrative expenses were $8,000. The company owns a delivery car and manufacturing equipment. The annual depreciation on the car is $ 1,000. The original cost of the equipment is $14,000 and has a salvage value of $2,000 after 3 years. The company produced 3,000 units and sold 1,000 units at a price of $15 a unit.

(1) Indicate the average cost to produce one unit

(2) Indicate the cost of goods sold

B. Which of the following transactions would cause net income for the period to be understated and explain why your answer is correct feel free to make-up numbers to help your explanation? a. Misclassifying period cost and considering it product cost b. Misclassifying product cost and considering it period cost c. All of the above d. None of the above EXPLAINATION:_________

C. Number of Units:

2,000 4,000

Total Cost:

Variable $8,000 $16,000

Fixed $8,000 $8,000

Cost per unit:

Variable $4.00 (a)

Fixed $4.00 (b)

Looking at the table above, what is (a):________________ and (b):______________________

D. Sales revenue (2,000 units * $50 per unit) $100,000

Cost of goods sold:

Variable (2,000 units * $20 per unit) (40,000)

Fixed (9,000)

____________

Gross Margin 51,000

Administrative Salaries (13,000)

Sales office Depreciation (4,000)

Sales supplies(2,000 units *$3 per unit) (6,000)

__________

Net Income $28,000

Using the income statement above, if sales increased by 20%,

(1) What percent will net income increase?

(2) How much will the new net income be?

E. UNITS SOLD

Cost #1	100	200	300	400
Cost #2	$12 per unit	$6 per unit	$4 per unit	$3 per unit
	$5 per unit	$5 per unit	$5 per unit	$5 per unit

Determine whether Cost #1 and Cost #2 is variable, fixed, or mixed and why

Cost #1:_________________. Why: ___________________________________________________

Cost #2:_________________. Why: ___________________________________________________

F. Happy Gilmore produces snackpacks. In 2016, its highest and lowest production levels occurred in July and January, respectively. In July, it produced 10,000 snackpacks at a total cost of $150,000. In January, it produced 5,000 snackpacks at a total cost of $100,000. Using the high/low method, determine (1) the variable cost per unit, and (2) the total fixed cost.

G. Barker Company's break-even point is 20,000 units. Its product sells for $50 and has a $30 variable cost per unit. What is the company's total fixed cost amount?

H. Cartman Company makes a Cheezy-poofs that sells for $5 a bag. Each bag has a variable cost of $1. Cartman has a total fixed costs of $8,000. At budgeted sales of $20,000. What is the margin of safety (in percentage)?

I. Butters Corporation recently noticed an increase in its fixed cost. All other costs and revenues were unchanged. What impact will this have on break-even point and the margin of safety (increase, decrease, or stay the same and why? feel free to make-up numbers to help explain why.

(1) Breakeven: _________________ Why:_______________________________________________________________

(2) Margin of Safety: _________________ Why:_______________________________________________________________

J. 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?

K. 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:

L. 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.

a. 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?

b. 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?

M. 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?

N. 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?) A._________________________________________________________________________ B._________________________________________________________________________ C._________________________________________________________________________