Question1: ShipShape Company makes 2 different types of boats, commercial fishing and sail boats both for recreation and competition. The company consists of two different departments, design & engineering, and production. The company has decided to allocate overhead costs in each of the two costs pools. Data on estimated overhead follows:

Activity Driver Estimated Overhead Cost Sailboat Estimate Fishing Estimate

Product Design # of designs $180,000 22 designs 18 designs

Production Labor hours $945,000 4,000 hours 3,500 hours

If the company produces and sells 22 sailboats, and each sailboat requires 180 labor hours, how much overhead will be assigned to each sailboat produced?

A $27,180

B $22,680

C $36,900

D $32,400

Question2: Molina Medical Supply Company is trying to decide whether or not to continue distributing hospital supplies. The following information is available for Molina