Q-5: Smart Enterprises has different division in its company. Its electrical Division produces a high-quality transformer. Sales and cost data on the transformer follow: Selling price per unit on the outside market $20 Variable costs per unit $10.50 Fixed costs per unit (based on capacity) $4.50 Capacity in units 30,000 Smart Company has an Auto Division that would like to begin purchasing this transformer from the Electrical Division. The Auto Division is currently purchasing 5,000 transformers each year from another company at a cost of $38 per transformer. Smart Company evaluates its division managers on the basis of divisional profits. Required: a) Assume that the Electrical Division is now selling only 25,000 transformers each year to outside customers. b) From the standpoint of the Electrical Division, what is the lowest acceptable transfer price for transformers sold to the Auto Division? c) From the standpoint of the Auto Division, what is the highest acceptable transfer price for transformers acquired from the Electrical Division? Q-6: Queen Company is using the following standard cost card for its product manufactured now a days is: Standard Cost Card-Per Unit Direct materials, 4 feet at $5 per foot $20.00 Direct labor, 0.75 direct labor-hours at $18 per direct labor- hour 13.50 Variable overhead, 0.8 direct labor-hours at $3 per direct labor-hour 2.40 Fixed overhead, 0.8 direct labor-hours at $6 per direct labor- hour 4.80 Total standard cost per unit $40.70 Last year, the company produced 5,000 units of product and worked 3,700 actual direct labor-hours. Manufacturing overhead cost is applied to production on the basis of direct labor-hours. Selected data relating to the company's fixed manufacturing overhead cost is as follows: Actual Fixed overhead cost $22,800 Volume variance $1,600 Fixed overhead Cost applied to Work in process = (---- hours * 6 per hour) =? Required: a) What were the standard hours allowed for the year's production? b) What was the amount of budgeted fixed overhead cost for the year? c) What was the budget variance for the year? d) What denominator activity level did the company use in setting the predetermined overhead rate for the year? Q-7: Sohar manufacturing company of Oman makes specialty tools used in the extraction industry. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed