Deepak is the owner of Dee's Nuts Inc. and produced and sold 40,000 units last year. Per unit revenue and costs were as follows:

Revenue		$100.00
Cost of Goods Sold:
Direct Materials	$15.00
Direct Labour	30.00
Variable Manufacturing Overhead	20.00
Fixed Manufacturing Overhead	10.00
Total Cost of Goods Sold		75.00
Gross Margin		$25.00
Selling and Administrative Costs:
Sales Commissions (10% of Sales)	$10.00
Administrative Salaries	20.00
Total Selling and Administrative		30.00
Operating Income

Fixed manufacturing overhead and administrative salaries are fixed costs. The per unit amounts are based on last year's production.

Calculate last year's operating income when the company produced and sold 40,000 units.

Select one:

a. $

b. $0

c. $

d. $

e. $

3.

Prof. Ray's Company produced 20,000 cases of beer with machinery usage of 1.5 hours per case. Budget outputs are 22,000 cases. What are the required static budget machine hour inputs and flexible budget machine hour inputs, respectively?

Select one:

a. 39,000 Machine hours, 33,000 Machine hours

b. 34,000 Machine hours, 39,000 Machine hours

c. 33,000 33,000 Machine hours, 30,000 Machine hours 00 Machine hours, 30,000 Machine hours

d. 30,000 Machine hours, 33,000 Machine hours

e. 39,000 Machine hours, 34,000 Machine hours

4.

a) A packaging company produces a variety of cardboard boxes in an automated process. Expected production per month is 160,000 units. The required direct materials costs $0.30 per unit. Variable manufacturing overhead costs are $24,000 per month and are allocated based on units of production. Direct labour is budgeted to be $6,400. The company only produces based on customer orders, so all production is considered sold as it is produced. Revenue for the month will be $240,000. What is the budgeted contribution margin per unit?

Select one:

a. $1.16 per unit

b. $1.31 per unit

c. $1.50 per unit

d. $1.01 per unit

e. $1.05 per unit

B)

Han Solo, controller of Millennium Falcon Mfg., has the choice of allocating indirect manufacturing cost using either direct manufacturing labour hours or manufacturing machine hours. If he uses labour hours for the month of January, Product A receives $312,000 in manufacturing overhead charges and Product B receives $448,000. When machine hours are used Product A receives $352,000 in manufacturing overhead charges while Product B receives only $408,000.

Required: You are the department manager in charge of Product A and are strongly in favour of using labour hours. Of course, your co-manager, who is in charge of Product B, is strongly in favour of machine hours. What are some arguments you may be able to give for the allocation base that favours your department's product?

A company had the following information pertaining to two different cases: Question 1 Not yet answered Marked out of 1.00 Case X Case Y $230,000 $130,000 P Flag question Budgeted fixed overhead Standard direct-labour hours 6,000 Flexible-budget variance 1,000 $10,000 F $6,000 u $20,000 U Production-volume variance $8,000 F The total fixed overhead variance in Case Y was Select one: O a. $12,000 favourable. O b. $12,000 unfavourable. O c. $10,000 unfavourable O d. $4,000 unfavourable. O e. $4,000 favourable