Hunter Industries manufactures hunting boots. The firm assigns overhead cost to products based on direct labor hours. For November, the budget reported total overhead of $ 162,000, of which $ 130,500 was fixed. Practical capacity is 4,500 direct labor hours per month to manufacture 6,000 pairs of boots. The factory used 4,600 direct labor hours to manufacture 5,700 pairs of boots. For November, actual variable overhead cost incurred was $ 31,510; actual fixed overhead cost incurred was $ 133,000.

1. What was the variable overhead efficiency variance?

2. What was the total fixed overhead cost variance?

3. What was the flexible-budget variance?

4. What was the production volume variance?

5. Was overhead over/under applied and by how much?

1.

Which of the following is not a stakeholder in a business?

2.

Which of the following does NOT describe managerial accounting?

3.

Jones company makes two products A & B. Here is some financial information about those products.

                         A    B     Combined total cost of cost drivers

Direct labor    $45,000 $35,000

Direct materials              $40,000 $30,000

Cost drivers

               Set ups 6    4 $10,000

             Inspections    4    6 $5,000

                 Test Runs 12     8 $25,000

                 Units produced    1000 1000

Using ABC Costing for overhead, what is the total cost for product A?

Assume that the market for fertilizer is perfectly competitive. Firms in the market are producing output but they are experiencing economic losses.

a.Explain how ATC, AVC and MC are related (Note: the relationship of these cost curves is same whether there is loss or profit). Explain how the price of fertilizer compares to the ATC, AVC and MC of producing fertilizer.

b. Draw two graphs side by side illustrating the present situation for the single firm and the entire market. Cleary label the diagrams and explain what you draw for both diagrams.

c. Assuming there is no change in demand curve or in cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the market. Draw a new set of diagrams to show the firm’s and market’s long-run equilibrium.

DiDonato Supplies manufactures two versions of presentation remotes: Basic and Laser. Both models go through the same assembly process and are produced in the same plant. The difference between the models is in the additional parts for the laser model as well as the cost of the parts themselves. The following data are available for the year just ended:

Required:

DiDonato uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Basic and Laser models for the year just ended. (Do not round intermediate calculations. Round "Unit cost" to 2 decimal places.)

A table factory requires 500 logs per year. Each time an order for logs is placed, an ordering cost of $20 is incurred. Each log costs $12 and the holding cost is $2/log/year. Assume that demand occurs at a constant rate and shortages are not allowed and the lead time is zero.

(a) If the quantity ordered is 150 units, calculate the total cost incurred (including ordering costs, purchasing costs and holding costs).

(b) What is EOQ?

(c) What is the minimum total cost?

(d) What is the number of cycles in a year, when EOQ is used as the order quantity?

(e) What is the duration of each cycle (in months)? (f) If the lead time (L) is 2 months, what will be the new reorder point? (g) If the lead time (L) is 3 months, what will be the new reorder point?

Rocky Mountain Tire Center sells 6,000 ​go-cart tires per year. The ordering cost for each order is ​$35​, and the holding cost is 40​% of the purchase price of the tires per year. The purchase price is ​$23 per tire if fewer than 200 tires are​ ordered, ​$17 per tire if 200 or​ more, but fewer than 5,000​, tires are​ ordered, and ​$14 per tire if 5,000 or more tires are ordered. ​

a) How many tires should Rocky Mountain order each time it places an​ order? Rocky​ Mountain's optimal order quantity is ____ units ​(enter your response as a whole​ number). ​

b) What is the total cost of this​ policy? The total annual cost of ordering optimal order size equals​ $ ____ ​(round your response to the nearest whole​ number).

Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows:
   

Harbour has monthly overhead of $187,570, which is divided into the following cost pools:

The company has also compiled the following information about the chosen cost drivers:      

The following matrix, illustrates each support department’s cost and how it spends its time:

Using the step-down method of support department cost allocation, determine the total support cost allocated to each operating department. Allocate costs in the following order: A&A, Personnel, Fleet Operations, Marketing.

Explain why the order of allocation given in part 1, above, may have been chosen.

(a) Haris spends all of his income on apples and oranges. He thinks that apples and oranges are perfect substitutes; one apple is just as good as one orange. Apples cost $4 a unit and oranges cost $5 a unit. His income is given by $120 per month. If the price of apples increases to $6 a unit, calculate the (i) Slutsky substitution (ii) Income and (iii) the total effect of a price decrease on the consumption of apples. (b) Now assume that he thinks apples and oranges are perfect complements. Apples cost $4 a unit and oranges cost $5 a unit. His income is given by $120 per month. If the price of apples decreases to $3 a unit, calculate the (i) Slutsky substitution (ii) Income and (iii) the total effect of a price decrease on the consumption of apples.