Question
Umanzor Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as
Umanzor Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Processing, $46,000; Supervising, $30,500; and Other, $26,500. Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:
MHs (Processing) | Batches (supervising) | |
Product S5 | 14,800 | 1,070 |
Product F5 | 820 | 1,040 |
Total | 15,620 | 2,110 |
The activity rate for the Processing activity cost pool under activity-based costing is closest to: |
$2.62 per MH | |
$3.24 per MH | |
$7.37 per MH | |
$2.94 per MH |
Part F
Zeeb Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit | Percent of Sales | ||
Selling price | $ | 200 | 100% |
Variable expenses | 50 | 25% | |
Contribution margin | $ | 150 | 75% |
Fixed expenses are $342,000 per month. The company is currently selling 3,700 units per month. |
The marketing manager believes that a $11,000 increase in the monthly advertising budget would result in a 100 unit increase in monthly sales. |
Required: |
What should be the overall effect on the company's monthly net operating income of this change? (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.) |
Change in net operating income | $ |
Part G
Puchalla Corporation sells a product for $340 per unit. The product's current sales are 14,500 units and its break-even sales are 11,745 units. The margin of safety as a percentage of sales is closest to:
19% | |
81% | |
77% | |
23% |
Lastly part H
The controller of Ferrence Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below:
Wall Mirrors | Specialty Windows | |
Total expected units produced | 7,000 | 1,400 |
Total expected material moves | 700 | 1,300 |
Expected direct labor-hours per unit | 11 | 10 |
The total materials handling cost for the year is expected to be $17,107.80. |
If the materials handling cost is allocated on the basis of direct labor-hours, the total materials handling cost allocated to the Wall Mirrors is closest to: (Round your intermediate calculations to 4 decimal places.) |
$14,476 | |
$7,666 | |
$9,315 | |
$12,643 |
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