Name: ACCT 285 - Practice Set #3 (Chapters 4-5) Chapter 4 Pops Pops is a start-up business that produces simple, colorful garlands for every occasion! Pops has the following cost and revenue data from January, the first month of garland production: Inventory Beginning Inventory 0 Garlands Produced 42,000 Garlands Sold 35,500 Sales Revenue Selling Price (per Garland) $ 22.00 Cost Direct Materials Cost (per Garland) 3.25 Direct Labor Cost (per Garland) 1.40 Variable Overhead Cost (per Garland) 2.50 Fixed Overhead Cost (Total) $ 94,500.00 Variable Selling & Administrative Cost (per Garland) $ 1.25 Fixed Selling & Administrative Cost (Total) $ 71,000.00 Assume that the company uses variable costing. 1) What is the unit product cost? 2) Prepare an income statement for January.3) What is the value of ending inventory using variable costing? Assume that the company uses absorption costing. 4) What is the unit product cost? 5) Prepare an income statement for December. 6) What is the value of ending inventory using absorption costing? Reconciliation 7) Complete a reconciliation of net operating income from variable costing to absorption costing for Pops. Chapter 5 Licensed Gear Co. Licensed Gear Co. manufactures and sells college athletic fan gear and uses Activity Based Costing for overhead costs. Licensed Gear Co. supplied the following financial information concerning its overhead costs and the Activity Based Costing system in 2022: Overhead costs: Wages 6: Salaries $925,000 Factory Depreciation $125,000 WM TOTAL $1,380,000 Distribution of resource consumption: ACIIIIJLCQSJLEQQLS CustomerProduct Orders Designs Other TOTAL Wages 6: Salaries 42% 46% 12% 100% Factory Depreciation 53% 33% 14% 100% Marketing Department Expenses 41%54% 5% 100% The amount of activity for the year is as follows: Cost Pool Activity Customer Orders 2.125 Orders Product Designs 325 Designs How much OVERHEAD cost would be allocated to Cyclone Tailgaters. a customer who initiated 20 orders and 5 custom designs in 2022? 1) Complete the first stage allocation of OH Costs based on activity cost pools. Customer Product Activit Cost Pools Orders Desi-n Other Total Wages and Salaries Factory depreciation Marketing dept. expenses Total 2) Complete the second stage allocation and calculate the activity rate [round your rates to the nearest cent): Total Activity Cost Pools Total Cost Activity Rate 3) Calculate the OH costs assigned to Cyclone Tailgaters: Total Overhead Cost Activity Cost Assigned to Cyclone Mi Rate Activity Tailgater; 4) Using the following information, set up a Customer Margin Statement using Activity Based Costing to determine the profitability of Cyclone Tailgaters. Sales $610,000 Direct Material Cost $245,000 Direct Labor Cost $200,000 Selling Cost $10,000 Customer Margin Report