Question 1:

GlassInc. has the following information for August 2015:

Selling price		$ 27	per unit
Variable expenses		$ 18	per unit
Fixed expenses		$ 8,010	per month
Actual Units Sold		1,040

Required:

1. Prepare a Contribution Income Statementwith the data provided.

2.Ifthey spend an extra $1,000 a month in advertising, sales will increase by 100units. Prepare a new Contribution Income Statement. Would their operatingincome increase or decrease?

3.Ifthey decrease the selling price from $27 to $23, sales volume would increase by50%. Prepare a new Contribution Income Statement. Would their operating incomeincrease or decrease?

kk

Question 2: The Long Term Care Plus Company has two service departments actuarial and premium rating, and two production departments marketing and sales. The distribution of each service department's efforts to the other departments is shown below: The direct operating costs of the departments (including both variable and fixed costs) were as follows:

Required:

Determine the totalcost allocated to the Marketing and Sales Department using the direct method.