Ahlam Corporation accumulates the following data concerning a maintenance cost: Month Miles Driven January 10,000 February 8,000 March 9,000 April 7,500 May 9.500 Maintenance Cost $15,000 $14,500 $12,500 $12,000 $14.900 Instructions: Using the High-Low method of analyzing costs, answer the following questions (2 marks each 1. What is the estimated variable portion of maintenance costs per mile driven? 2. What is the estimated fixed maintenance cost each month? 3. If it is estimated that 15.000 miles driven will be run in July, what is the expected total maintenance cost for July? Part B: (10 marks) Manama Company manufactures three products. Information about the three product lines for the year is as follows: Galaxy 1 6 Galaxy 2 9 6 Galaxy 3 12 Product Selling price $ Variable costs $ Budgeted sales (units) 9 2 800 1,000 200 Assume that the sales mix is 'fised in these proportions Foxed costs are $8,160 Instructions: 1. What is the breakeven sales volume? (6 marks) 2. What is the breakeven sales revenue? (4 marks) 26 Question 3: (14 marks) (BI, CI) Part A: (6 marks) Ahlia Corporation incurred the following costs while manufacturing its product. Materials used in product $ 120,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 19.000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line workers 110,000 Sales commissions 35,000 Factory supplies used Salaries paid to salesclerks 23,000 50,000 Work-in-process inventory was $22,000 at January 1 and $15,500 at December 31. Instructions Compute cost of goods manufactured. Part B: (8 marks) Ahlia Co. has a unit selling price of $6.5, variable cost per unit $4.5, and fixed costs of $10,000 Instructions: 1. What is the breakeven revenue? (2 marks) 2. If budgeted sales are 8,500 units, what is the margin of safety in units? What is the margin of safety as a %? What does this mean? (4 marks) 3. What is the sales volume (in units) required to make a profit of $20,000? (2 marks) Question 4: (10 marks) (B1, C3) Part A: (6 marks) Ahlia, Inc. makes and sells buckets. Each bucket uses 1/2 pound of plastic. Budgeted production of buckets in units for the next three months is as follows: April May June Budgeted production 21,000 22,000 24,000 The company wants to maintain monthly ending inventories of plastic equal to 25% of the following month's budgeted production needs. The cost of plastic is $2.20 per pound. Instructions: Prepare a direct materials purchases budget for the month of May. Part B: (4 marks) Zain Company goes through two departments in the production process. Each product requires two direct labor hours in Department A and one hour in Department B. Labor cost is $8 per hour in Department A and $10 per hour in Department B Assuming the amount budgeted to be produced in January is 30,000 units, what is the budgeted direct labor cost for January
