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1. Koffee Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,000 and the variable cost per cup of coffee served is $0.53. Required: 1. Fill in the following table with your estimates of total costs and average cost per cup of coffee at the indicated levels of activity for a coffee stand. (Round your answers to nearest dollar amount. Round the "Average cost per cup of coffee" to 3 decimal places.) Cups of Coffee Served in a Week 1,100 1,200 1,300 Fixed cost $ $ $ Variable cost Total cost $ $ $ Average cost per cup of coffee served $ $ $ 2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Increases Decreases Remains the same 2. The Edelweiss Hotel in Vail, Colorado, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Occupancy- Electrical Month Days Costs January 3,560 $ 6,573 February 3,420 $ 6,209 March 4,120 $ 7,022 April 1,990 $ 5,174 May 430 $ 1,118 June 1,750 $ 4,550 July 3,690 $ 6,687 August 3,970 $ 6,968 September 1,950 $ 5,070 October 1,450 $ 3,770 November 2,050 $ 5,330 December 2,300 $ 5,980 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. (Round the "Variable cost per occupancy-day" to 2 decimal places and the "Fixed cost" to the nearest dollar amount.) Fixed cost $ per month Variable cost $ per occupancy-day 2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Seasonal factors like winter or summer. Systematic factors like guests, switching off fans and lights. Number of days present in a month. Fixed salary paid to hotel receptionist. Income taxes paid on hotel income. 3. Parker Company manufactures and sells a single product. Required: 1. A partially completed schedule of the company's total and per unit costs over a relevant range of 52,000 to 92,000 units produced and sold each year is given below. Complete the schedule of the company's total and unit costs. (Round the "Cost per unit" to 2 decimal places.) Units Produced and Sold 52,000 72,000 92,000 Total costs: Variable costs $ 156,000 $ $ Fixed costs 410,000 Total costs $ 566,000 $ $ Cost per unit: Variable cost $ $ $ Fixed cost Total cost per unit $ $ $ 2. Assume that the company produces and sells 82,000 units during the year at the selling price of $9.69 per unit. Prepare a contribution format income statement for the year. (Input all amounts as positive values except losses which should be indicated by a minus sign.) Parker Company Contribution Format Income Statement (Click to select) : $ (Click to select) : (Click to select) : (Click to select) : (Click to select) : $ 4. Logan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 30,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $507,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $654,225 and its actual total direct labor was 30,500 hours. Required: Compute the company's predetermined overhead rate for the year. (Round your answer to 2 decimal places.) Predetermined overhead rate $ per DLH 5. Westan Corporation uses a predetermined overhead rate of $22.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $266,400 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of $270,000 and 10,300 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period. Manufacturing overhead applied $ 6. Cretin Enterprises uses a predetermined overhead rate of $21.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $169,812 of total manufacturing overhead for an estimated activity level of 8,010 direct labor-hours. The company incurred actual total manufacturing overhead costs of $170,500 and 8,260 total direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. (Input the amount as a positive value.) Manufacturing overhead (Click to select) : $ 2. Assuming that the entire amount of the underapplied or overapplied overhead is closed out to Cost of Goods Sold, what would be the effect of the underapplied or overapplied overhead on the company's gross margin for the period? (Input the amount as a positive value.) The gross margin would (Click to select) : by $ 6. Cretin Enterprises uses a predetermined overhead rate of $21.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $169,812 of total manufacturing overhead for an estimated activity level of 8,010 direct labor-hours. The company incurred actual total manufacturing overhead costs of $170,500 and 8,260 total direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. (Input the amount as a positive value.) Manufacturing overhead (Click to select) : $ 2. Assuming that the entire amount of the underapplied or overapplied overhead is closed out to Cost of Goods Sold, what would be the effect of the underapplied or overapplied overhead on the company's gross margin for the period? (Input the amount as a positive value.) The gross margin would (Click to select) : by $ Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Estimated Activity Cost Pool Overhead Cost Expected Activity Labor-related $58,000 7,800 direct labor-hours Machine-related $ 15,500 21,025 machine-hours Machine setups $ 43,000 400 setups Production orders $20,000 500 orders Product testing $ 41,000 2,100 tests Packaging $ 74,125 5,000 packages General factory $ 112,125 7,800 direct labor-hours 7. Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Labor-related $ per DLH Machine-related $ per MH Machine setups $ per setup Production orders $ per order Product testing $ per test Packaging $ per package General factory $ per DLH 8. 2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead $ rate per DLH Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity- based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Activity Measure Total Cost Total Activity Customer deliveries Number of deliveries $ 280,000 4,000 deliveries Manual order processing Number of manual orders 195,000 3,000 orders Electronic order processing Number of electronic orders 172,500 11,500 orders Line item picking Number of line items picked 300,000 300,000 line items Total selling and administrative expenses $ 947,500 Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Activity Measure City General County General Number of deliveries 20 40 Number of manual orders 80 Number of electronic orders 15 Number of line items picked 150 310 Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Customer deliveries $ per delivery Manual order processing $ per manual order Electronic order processing $ per electronic order Line item picking $ per line item picked 2. Compute the total activity costs that would be assigned to City General and County General. (Leave no cells blank - be certain to enter "0" wherever required Do not round intermediate calculations.) City General: Activity Cost Pool ABC Cost Customer deliveries $ Manual order processing Electronic order processing Line item picking Total activity costs $ County General: Activity Cost Pool ABC Cost Customer deliveries $

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