Nikki started by talking with her parents about some of the estimated sales and costs that they thought would incur for the month of September. Here are some of those estimates:

	total	apple pies	candy apples
sales price (per unit)		$20	$7.50
expected sales (for september)	13000	5250	7750
expected manufacturinf costs	total	apples pies	candy apples
fixed OH (per month)	18750	16500	2250
Direct labor(per unit)		3.50	1.90
direct materials (per unit)		2.50	1.60
variable OH (per unit)		1.50	0.70
expected marketing and admin costs
fixed costs (per month)	5000	3750	1250
variable costs(per unit)		1.25	0.25

Assitionally, Sally informed her that the farm received a special order to sell their apples pies and caramel apples at the local country fair in Septermber. Sally wanted to sell 2000 pies and 3000 caramel apples for a discounted price of $17 and $5.50 respectively. With the amount of staff and the size of the bakery, Nikki determined that the maximun capacity for the bakery is 2000 labor hours a month. At the current projected sale amounts she expects that they'll need 1625 hours to meet their regular sales volume. After review of the salaries of all the staff, Nikki determined that the average hourly wage was $13. Ned was also concerned about how much it cost to kkep apple pie inventory on hand at the end of the month, caramel apples have to be sold within a couple days so no inventory is left at the end of the month. Since there is a limited shelf life for the apple pies, Ned and Sally try and keep the ending inventories low. They are hoping to have only 250 apples pies in progress at the end of the month and 350 finished pies. They think that the associated costs for these inventories will be $675 for the in progress pies and $3125 for the finished pies. They started production for September sale of apple pies at the end of August. At the end of August there were 500 pies that were 50% completed in progress and no finished pies. The variable cost associated with these inventories were as follows:

	DM	DL
Begining WIP inventory (50% completed as to labor)	1125	1300
September costs	17750	18200

and the conversion cost for the in progress pies is 50% and 75% of direct labor is applied to overhead. (Use the expected for September Apple Pie sales for determining units started and units completed and transferred out) September was a success for the bakery. They were able to complete the special order and with some overtime baked a few more pies. Here were the results for the actual sales and cost at the end of the month.

	total	apple pies	candy apples
Actual sales price (price unit)		$22.50	$7.00
Actual sales	17750	7250	10500
Actual variable manufacturing OH	81625
actual variable marketing and admin cost	15125
actual fixed manufacturing costs	16750
Actual marketing and admin costs	5250

A) Computations 5250 apples pies

1. Variable manufacturing cost 2. Full unit cost 3.Variable cost per unit 4.Full Absorption cost per unit 5.Prime cost per unit 6.Conversion cost per unit. 7.Profit margin per unit. 8.Contribution margin per unit 9.Gross margin per unit