Question 1

Kendall ltd, a manufacturing firm, manufactures chains. The company has supplies information from its accounts records for the last year

Month	Factory overhead	number of chains
January	$25,516	5,850
February	$26,860	6,375
March	$31,276	8,100
April	$25,900	6,000
May	$28,780	7,125
June	$32,044	8,400
July	$24,940	5,625
August	$27,820	6,750
September	$28,204	6,900
October	$28,076	6,850
Novemeber	$29,356	7,350
December	$33,196	8,850

• Using the high low method, what is the variable factory overhead per chain
• What is the fixed cost for factory overhead
• If the company manufactures, 7,900 chains, what will its total overhead costs be?

Part 2

• if the company increase their production of chains by 45% in any given month, would the factory overhead cost per chain increase, decrease, or stay the same

Question 2

Linden industries sell two products, the basic model and the deluxe model. The basic model sells for $40 per unit with a variable cost of $30 per unit. Delux models sell for $50 per unit with a variable cost of $33 per unit. The total fixed cost for the company are $113,400. The company typically sells five basic models for two deluxe model

• What is the company weighted average contribution margin per unit
• What is the company's total break-even points in units
• How many units of each model does the company sell per year to break even? Enter the number of units below each model
  • Basic model
  • Deluxe model

Question 3

Barney inc has the following information available with regard to their total cost per month

Production (in units)	10,400
Total variable costs	$59,488
Total fixed cost	?
Total costs	?

The company also has the following information available with regards to their per unit cost:

Variable cost per unit	?
Fixed cost per unit	$4.85
Average cost per units	?

Use the above information to answer the following question

• If production decrease to 9,000 units, total fixed cost would be
• If production decrease to 9,000 units, the variable cost per unit would be
• If production decrease to 9,000 units, would the average cost per unit increase, decrease or stay the same

Question 4

Bankview industries use department overhead rates to allocate its manufacturing overhead to job. They completed job 542 in October. The company has two departments. Assembly and sanding, with the following overhead allocation base rate

	Allocation base	Overhead rate ($/hr)
Assembly department	machine hour	20
Sanding department	direct labour hour	15

the job used the following direct labour hours and machine hours in the two department

Actual result	Assembly department	Sanding department
Direct labour hours used	4	3
Machine hours used	9	5

Other details of the job

Hourly rate for direct labours	$25
Direct materials used	1200

• Compute the overhead costs allocated to the job in the assembly department
• Compute the overhead cost allocated to the job in the sanding department
• What is the total overhead allocated to the job
• What was the total of the job

Question 5

Linda ice cream shop has a monthly target operating income of $7,950. Variable expenses are 70% of sales and monthly fixed expenses are $7,450. What is Linda operating leverage factor at the target level operating income