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Clayton Inn is a fast-food restaurant that sells burgers and hot dogs in a 1990 environment. The of the company are $10,000 per month. The controlling shareholder, interested in product profitability and prang, wants all costs allocated to either the burgers or the hot dogs. The following information is provided for the operations of the company Burgers Hot Doge Sales for January 4,000 2,700 Sales for February 6,500 2,800 What amount of fixed operating costs is assigned to the burgers and hot dogs when actual sales are used as the allocation base for February? burgers $5,970 and hot dogs $4,030 burgers $3,011 and hot dogs $6,989 burgers $4,030 and hot dogs $5,970 burgers $6,989 and hot dogs $3,011 The Atlanta Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year. $69,000 3 cents (0.03) per copy Budgeted costs of operating the copying facility for 300,000 to 500,000 copies: Fixed costs per year Variable costs Budgeted long-run usage in copies per year. Marketing Department Operations Department 100,000 copies 360,000 copies Budgeted amounts are used to calculate the allocation rates. Actual usage for the year by the Marketing Department was 70,000 copies and by the Operations Department 330,000 copies. If a single-rate cost-allocation method is used, what amount of copying facility costs will be all to the Marketing Department? Assume actual usage is used to allocate copying costs. (Do not round interim calculations and round the final calculation to the nearest dollar.) $20,250 $12,600 The Morrow Repair Shop repairs and services machine tools. A summary of its conuts (by Mativity) for 20720 is as follows: a. Materials and labor for servicing machine tools 51.100.000 b. Rework costs 90.000 c. Expediting costs caused by work delays 65.000 d. Materials-handling costs 80.000 e. Materials-procurement and inspection costs 45.000 f. Preventive maintenance of equipment 55.000 g. Breakdown maintenance of equipment 75.000 Which cost is classified as value-added? Materials, Materials handling costs, Materials procurement and inspection costs Preventive maintenance of equipment Materials and labor for regular repairs Materials and Rework costs Sarasota Bicycles has been manufacturing its own wheels for its bikes. The company is currently operating a 100 capacity, and variable manufacturing overhead is charged to production at the rate of 30% of direct labor cont. To direct materials and direct labor cost per unit to make the wheels are $300 and $3.66 respectively. Normal prode is 200,000 wheels per year. A supplier offers to make the wheels at a price of $8 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $84,000 of fixed manufacturing overhead currently being char the wheels will have to be absorbed by other products. What is the impact on the company's net income The company's net income would decrease $46,000 by purchasing the wheels. The company's net income would decrease $46,000 by purchasing the wheels The company's net income would decrease $64,000 by purchasing the wheels The company's net income would increase $64,000 by purchasing the wheels
