1. .Frase Corp is manufacturing marbles in two types TYPE1 and TYPE2. These two product and the company has the following cost structure. The company is using Activity Based Costing method.

Overhead Activities	Activity Cost	Cost driver
Machine Setup	$180.000	1500	setup hours
Materials Handling	$ 50.000	12500	pounds of mat. Hand.
Generating electric power for production	$20.000	20000	kilowatt hours

	TYPE1	TYPE2
Number of units produced	10.000	20.000
Direct materials cost	$20.000	$ 25.000
Direct labor cost	$ 12.000	$ 20.000
Number of setup hours	100	120
Pounds of materials used	500	1500
Kilowatt-hours used	1000	2000

1. What is the total cost for TYPE1 and TYPE2 (10 points)

6. 2. WHat is the cost per unit for TYPE1 and TYPE2 (10 points)
7. "A small company that produces a single product has the following cost structure." Number of Units produced 6000

Number of Units sold 5000

Selling Price $20

Variable cost per unit:

Direct materials $2

Direct labor $4

Variable manufacturing overhead $1

Fixed costs per year:

Fixed manufacturing overhead $30.000 Fixed selling and administrative expenses $10.000

1. What is the production cost per unit under absorption costing (5 points)
2. What is the production cost per unit under variable costing (5 points)
3. What is the value of ending inventory under absorption (5 points)
4. What is the value of ending inventory under variable costing(5 points)
5. Explain why there is a difference on the value of ending inventory (15 points)