The following information is useful in answering questions 1 to 6: Acme makes and sells two products, the Alpha and the Beta, and the firm has a target gross profit percentage of 40%. Acme currently employs an absorption costing system, using one, plant-wide overhead rate based on direct labor hours. The budgeted manufacturing overheads for the year amounted to $500,000, and the total labor hours for the year were expected to be 10,000 hours, of which 75% were expected to be direct labor hours, and 25% were expected to be indirect labor hours. To begin using activity-based costing, Acme also calculated budgeted overheads in terms of the following three activities Activity Cost Pool Activity Cost Activity Cost Driver Processing $160,000 2,000 Materials Moves Quality control $240,000 600 Number of Inspections Shipping $100,000 200 Number of Shipments The following data concerns the actual manufacture of one unit of Alpha and one unit of Beta respectively: Alpha Beta Net sales price $2,700.00 $2,300.00 Direct materials cost (@$5 per 1b.) $50.00 $50.00 Direct labor cost (@ $10 per hr) $220.00 $180.00 Machine Hours 12 8 Materials Moves Number of Inspections Number of Set-up Number of Shipments 1. Calculate the total cost of each unit of Alpha, using a single, predetermined overhead rate based on direct labor hours. (Show your calculations for full credit.) 2. Calculate the total cost of each unit of Beta, using a single, predetermined overhead rate based on direct labor hours. (Show your calculations for full credit.) 3. Calculate the total cost of each unit of Alpha using activity-based costing. (Show your calculations for full credit.)4. Calculate the total cost of each unit of Beta using activity-based costing. (Show your calculations for full credit.) 5. According to activity-based costing, what drives up the cost of the higher cost product? (Briefly explain your answer.) 6. Given the target gross profit percentage, does your analysis above suggest any changes need to be made? Why or why not? And what changes would you recommend if any?The following information is useful in answering questions 7 to 12: XYZ manufactures one product. Summary financial data for the last two years is as follows: 2020 2021 2,600 3,200 130,000 160,000 110,000 128,000 Sales (units) Sales revenue Total expenses Net income 20,000 $ 32,000 7. Use the high-low method to estimate variable cost per unit and total fixed costs for 2022. (Use 2020 as the low case and 2021 as the high-case) 8. What assumptions did you need to make in answering the previous question? (List at least two assumptions. 9. In what cases might it be unwise to use high-low analysis to estimate cost structure (fixed versus variable)? 10. What is the break-even point in units in 2022? 11. If advertising expenditure were to be increased by $15,000 in 2022, resulting in a unit sales price increase of 10%, how would this affect break-even? And would this be a worthwhile expenditure? 12. What will be the effect of the increase in advertising on operating leverage (all else being equal)? And what does this mean for the business?The following information is useful in answering questions 13 to 15: Acme produces a single product. Normal revenue and costs per unit are as follows: Sales price Per unit 8 63.00 Direct costs per unit 25.00 Variable overhead per unit 3.00 Fixed overhead per unit 4.00 Standard cost per unit 3 "2? [1! Income per unit E After completing its usual monthly orders3 Acme received a oneoff order from a rm in Canada to purchase 500' units at $50 each. If they do not fulll the Canadian order, they would have capacity to fulll an alternative order deriving a net cash in-flow of 39,000. To fulll the Canadian order, Ame would have to use a machine it purchased last year for $3.500. (This machine was us ed last year for a different Proiect and has no alternative uses this year.) And Acme would need to rent additional warehouse space costing 32,500. 13. Calculate the dollar value of the increase (or decrease) in monthly Profits if Acme accepts the special order. (Show a decrease in prots as a negative number.) 14. So3 does this analysis suggest Acme should accept the special order? {Simply state yes'1 or no.) 1:). What qualitative factors might change your decision in this case? (List at least two relevant factors.) The following information is useful in answering questions 16 to 18: The following summary performance report is for the Coffee Bean Division, a Profit Center of Acme, Inc. Actual Results Original Budget Sales (Units) 13,000 12,000 Revenues 715,000 696,000 Variable costs 429,000 408,000 Fixed costs 170,000 180,000 Total costs 599,000 5 88,000 Net operating income 116,000 1 08,000 16. What is the general implication of the performance report? (Show calculations for full credit and consider both costs and revenues.) 17. Why might Acme question the significance of the report? 18. Revise the performance report using flexible budgeting, and comment on the general implication of the revised report. (Show calculations for full credit and consider both costs and revenues.)The following information is useful in answering questions 19 to 20: The income statements for each of the three divisions of ABC Inc. show the following amounts (in millions of dollars): Division A Division B Division C Revenues 50 100 80 Net Operating Income 10 25 $ 10 Ave. Total Assets 100 150 $ 80 19. Which division has the highest ROI? (Show your calculations for full credit.) 20. What does DuPont Analysis reveal about the reasons for this division's relatively high ROI? 21. What causes the ROI to be higher in this case? (Show your calculations for full credit.)