please dont pick this up if you cant answer the problems within 45 minutes... you can work on one at a time and send it to me.

QUIZ 3 This is a group assignment. All discussions and final responses should be posted in the appropriate group discussion area. Show work for partial credit. You have 3 hours for this assignment from the start time requested. Question 1 (1 point) Xenon Company manufactures 10,000 special gears for use in its annual production activities. The following costs are reported: Direct materials, $3/gear Direct labor, $4/gear Variable Factory Overhead, $4.5/gear Fixed Factory Overhead, $70,000 Parts Plus has offered to sell Xenon 10,000 of these gears for $17 per unit. If Xenon accepts the offer, $40,000 of the fixed factory overhead to special gears would be totally eliminated. What would be the effect on Xenon's income of accepting Parts Plus's offer? Question 2 (1 point) Zurich Inc. has determined the following cost data: Variable Manufacturing, $15/unit Fixed Manufacturing,$36,000 Variable Selling, $ 1/unit Fixed Selling & Administrative, $18,000 The normal selling price is $25 per unit. The company has an opportunity to bid on a one-time only sale of 1,000 units. The variable selling costs would be replaced by a bulk shipping charge of $500. If excess capacity exists, and this order would not disturb regular sales, what would be the company's incremental cost per unit of accepting this special offer? Question 3 (2 points) Hardware Corp. is planning to buy production machinery. This machinery's expected useful life is 5 years, with a $10,000 residual value. They require a minimum rate of return of 12%, and have calculated the following data pertaining to the purchase and operation of this machinery: Year Estimated Annual Cash Inflow Estimated Annual Cash Outflow Depreciation 1 $60,000 $10,000 $30,000 2 $80,000 $20,000 $30,000 3 $95,000 $25,000 $30,000 4 $115,000 $35,000 $30,000 5 $140,000 $50,000 $30,000 Determine the payback period, the accounting rate of return, and the net present value for this investment. (Ignore taxes & indicate answers to 2 decimal places) Question 4 (2 points) Norwest is planning on purchasing a welding machine. The expected cost of this machine is $60,000, and it is expected to have a useful life of 7 years with an estimated salvage value of $4,000. The machine is expected to produce cash savings of $20,000 per year in reduced labor costs and the cash operating costs to run this machine are estimated to be $6,000 per year. Assuming Norwest is in the 34% tax bracket and has a minimum desired rate of return of 14% on this investment. Determine the payback period, the accounting rate of return, and the net present value for this investment. (Indicate answers to 2 decimal places) Question 5 (2 points) Valdosta State University has two colleges, College of Business Administration (COBA) & College of Education (COE). The two support departments are Physical Plant & the Library. The costs incurred in each of these departments is as follows: COBA $ 90,000 COE $ 70,000 Physical Plant $120,000 Library $ 80,000 The actual level of support is as follows: Supplied by Used by Physical Plant Library COBA COE Physical Plant Library 40% 20% 35% 25% 50% 30% Determine the: Cost allocated to COBA using the direct method Cost allocated to COBA using the step-down method (allocating Library first) Cost allocated to COBA using the reciprocal method Question 6 (2 points) Trident Company produces two varieties of pine wood, A & B, from a common processing of lumber. The amount of each product produced in March 2001 is 24,000 square feet and 28,000 square feet respectively. A is a superior grade pine and sells for $6 per square foot. B sells for $5 per square foot. The additional processing costs for A & B are $48,000 and $15,000 respectively. The joint processing cost is $125,000. Determine the following: Joint cost allocated to each product A & B using the physical volume method, relative sales value method, and net realizable value method. The unit cost of each product using the net realizable value method