TCO 1) George Corporation has an estimated monthly sales of 3,200 units for $35 per unit. Variable costs include manufacturing costs of $18 and distribution costs of $7. Fixed costs are $20,000 per month.

Required: Determine each of the following values. a. Unit contribution margin b. Monthly break-even unit sales volume Create a contribution margin-based income statement.

2 (TCO 7) Darling Manufacturing Inc. manufactures two products, A and B, from a joint process. A single production costs $10,000 and results in 200 units of A and 600 units of B. To be ready for sale, both products must be processed further, incurring seperable costs of $2 per unit for A and $1 per unit for B. The market price for Product A is $30 and for Product B is $25.

Required: Allocate joint production costs to each product using the constant gross margin percentage method.

(TCO 5) The Baxter Corporation has the following budgeted and actual results.

Budgeted data

Actual results

Unit sales

20,000

Unit sales

22,000

Unit production	20,000		Unit production	24,000
Fixed overhead			Fixed overhead

	Supervision	$20,000			Supervision	$19,860
	Depreciation	$30,000			Depreciation	$30,000
	Rent	$10,000			Rent	$10,000

Variable costs per unit

Variable costs

	Direct materials	$16.00			Direct materials	$340,000
	Direct labor	$19.00			Direct labor	$420,000
	Supplies	$0.20			Supplies	$7,200
	Indirect labor	$1.30			Indirect labor	$28,500
	Electricity	$0.12			Electricity	$3,000

Required: Prepare a performance report for all costs, showing static budget variances (indicate F or U

(TCO 6) Santa Inc. manufactures toys based on the following information. Santa Inc. manufactures toys based on the following information.

Standard Costs

		Materials (4 ounces at $5)			$20
		Direct labor (1 hour per unit)			$6
		Variable overhead (based on direct labor hours)			$4.00

Fixed overhead budget

$14,000

Actual results and costs

Materials purchased

			Units	8,000
			Cost	$38,500

Materials used in production

			Finished product units	2,050
			Raw material (ounces)	8,300
			Direct labor hours	2,050
			Direct labor cost	$12,200
			Variable overhead costs	$8,150
			Fixed overhead costs	$14,600

Required

Compute the following variances (show calculations).

	a. Materials usage variance
	b. Labor rate variance
	c. Fixed overhead budget variance

(TCO 4) The following is the current variable costing income statement for Flower Corporation.

Sales (10,000 units)		$150,000
Variable expenses
Cost of goods sold	$65,000
Selling (10% of sales)	$15,000	$80,000
Contribution margin		$70,000

Fixed expenses:
	Manufacturing overhead	$22,000
	Administrative	$10,300	$32,300

Operating Income

$37,700

Below is the following information on operations for Flower Corporation.

Beginning inventory (units)	0
Units produced (units)	11,000

Manufacturing costs
Direct labor (per unit)	$4.00
Direct materials (per unit)	$2.20
Variable overhead (per unit)	$1.80

Required

Prepare an absorption costing income statement.

(TCO 8) Musical Instruments Company manufactures two products (trumpets and trombones). Overhead costs ($58,500) have been divided into three cost pools that use the following activity drivers.

Product Number of setups Machine hours Packing orders

Trumpets 50 250 100

Trombones 50 750 150

Cost per pool $3500 $ 30,000 $ 25,000

Required (show all calculations)

a. What is the allocation rate for trumpets per setup using activity-based costing?

b. What is the allocation rate for trumpets per machine hours using activity-based costing?

c. What is the allocation rate for trumpets per packing order using activity-based costing?