Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: Activity Cost Pool (and Activity Measure) Total Cost Machine related (machine-hours) $ 135,200 Batch setup (setups) $ 604,800 Order size (direct labor-hours) $ 121,500 Total Activity Activity Cost Pools Product X Product Y Total Machine related 1,400 6,600 8,000 Batch setup 2,900 5,100 8,000 Order size 6,400 2,600 9,000 The total amount of overhead cost allocated to Product X would be closest to:

Suppose soft drink production at bottling plant is described by the production function:

? =??^?.?

where y is the number of cases of soft drinks produced and x is the number of hours of labor hired. We also assume the wage for labor is r, price for soft drink is p and fixed costs is $1,000.

  How many cases of soft drinks will be produced with 4 hours of labor?
  Find each of the following if 4 hours of labor are employed. Please include units.

Average product of labor:

Marginal product of labor:

Total variable cost:

Total fixed cost:

Total costs:

Average variable cost:

Average fixed cost:

Average total costs:

A specialist graphics company is investing in a new machine which enables it to make high quality prints for its clients. Demand for these prints is forecast to be around 50,000 units in year 1 and 80,000 units in year 2. The maximum capacity of each machine the company will buy to process these prints is 60,000 units per year. They have a fixed cost of RM40,000 per year and a variable processing cost of RM0.50 per unit. The company believe they will be able to charge RM2 per unit for producing the prints.

1. Calculate the total cost for year 1.
2. What is the total profit for year 1?
3. Calculate the total cost for year 2.   
4. What is the total profit for year 2?

Smoky Mountain Corporation makes two types of hiking boots—Xtreme and the Pathfinder. Data concerning these two product lines appear below:   

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:    

Required:

1. Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system. (Do not round your intermediate calculations.)

2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs):   
   .

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Negative product margins should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places.)

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round intermediate calculations. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))

Allocating Joint Costs Using the Constant Gross Margin Method

A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:

Required:

1. Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze.

2. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method. Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar.

(Note: The joint cost allocation does not equal $12,900 due to rounding.)

3. What if it cost $2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to these three products? Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar.

(Note: The joint cost allocation does not equal $12,900 due to rounding.)

Allocating Joint Costs Using the Constant Gross Margin Method

A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:

Required:

1. Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze.

2. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method. Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar.

(Note: The joint cost allocation does not equal $12,900 due to rounding.)

3. What if it cost $2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to these three products? Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar.

(Note: The joint cost allocation does not equal $12,900 due to rounding.)

Allocating Joint Costs Using the Constant Gross Margin Method

A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:

Required:

1. Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze.

2. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method. Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar.

(Note: The joint cost allocation does not equal $12,900 due to rounding.)

3. What if it cost $2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to these three products? Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar.

(Note: The joint cost allocation does not equal $12,900 due to rounding.)

1. Allocating Joint Costs Using the Constant Gross Margin Method

   A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,700. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:

   Product	Gallons	Further Processing Cost per Gallon	Eventual Market Price per Gallon
   L-Ten	3,400	$0.50	$2.00
   Triol	4,000	1.00	5.00
   Pioze	2,600	1.50	6.00

   Required:

   1. Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze.

   Total Revenue	$
   Total Costs	$
   Total Gross Profit	$

   2. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method. Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar.

   	Joint Cost
   Product	Allocation
   L-Ten	$
   Triol
   Pioze
   Total	$

   (Note: The joint cost allocation does not equal due to rounding.)

   3. What if it cost $2.00 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to these three products? Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar.

   	Joint Cost
   Product	Allocation
   L-Ten	$
   Triol
   Pioze
   Total	$

   (Note: The joint cost allocation does not equal due to rounding.)

Check My Work

Need answers for E,F,G,H

Rose Company has a relevant range of production between 9,000 and 25,000 units. The following cost data represents average cost per unit for 14,000 units of production.

Using the cost data from Rose Company, answer the following questions:

A. If 9,000 units are produced, what is the variable cost per unit?

Variable cost per unit $ 25

B. If 18,000 units are produced, what is the variable cost per unit?

Variable cost per unit $ 25

C. If 21,000 units are produced, what are the total variable costs?

Total variable costs $ 525,000

D. If 11,000 units are produced, what are the total variable costs?

Total variable costs $275,000

E. If 19,000 units are produced, what are the total manufacturing overhead costs incurred?

Total manufacturing overhead costs $

F. If 24,000 units are produced, what are the total manufacturing overhead costs incurred?

Total manufacturing overhead costs $

G. If 19,000 units are produced, what are the per unit manufacturing overhead costs incurred? If required, round final answer to two decimal places.

Manufacturing overhead costs per unit $

H. If 25,000 units are produced, what are the per unit manufacturing overhead costs incurred? If required, round final answer to two decimal places.

Manufacturing overhead costs per unit $

a)Why is the ATC U-Shaped?

b)Why is marginal curve upward sloping in the short run ?

c)Where and why does the MC curve cross the ATC curve?

d)Given values for ATC and AVC,how would you determine Fixed cost (what are the steps necessary to get from the first twoto the last one )?

e)Given ATC,how would you determine total cost?

f)Graphically show and verbaly explain what the general pattern of and relationship between fixed cost,variable cost and total cost as output increase?

g)Graphically show and verbally explain what the general pattern of and relationship between average total cost,average variable cost and marginal cost as output increases?