The Chromosome Manufacturing Company produces two products, X and Y. The company president, Jean Mutation, is concerned about the fierce competition in the market for product X. She notes that competitors are selling X for a price well below Chromosome's price of $12.70. At the same time, she notes that competitors are pricing product Y almost twice as high as Chromosome's price of $12.50.

Ms. Mutation has obtained the following data for a recent time period:

                                                                                 Product X          Product Y
         Number of units                                                 11,000                   3,000
         Direct materials cost per unit                            $3.23                   $3.09
         Direct labor cost per unit                                  $2.22                   $2.10
         Direct labor hours                                              10,000                   2,500
         Machine hours                                                    2,100                   2,800
         Inspection hours                                                    80                      100
         Purchase orders                                                    10                         30

Ms. Mutation has learned that overhead costs are assigned to products on the basis of direct labor hours. The overhead costs for this time period consisted of the following items:

         Overhead Cost Item                                     Amount
         Inspection costs                                           $16,200
         Purchasing costs                                              8,000
         Machine costs                                                 49,000
            Total                                                             $73,200

Question #1: Using Direct labor Hours to allocate overhead costs determine the gross margin per unit for Product X. Choose the best answer from the list below.
$1.93
$10.07
$7.38
$2.43
$1.73

Using ABC for overhead allocation, determine the gross margin per unit for Product Y.
Choose best answer from list below.
$10.07
($2.27)
$19.52
($7.02)
$7.02

Question 3 1 pts
Hyde Farms Per Unit
Direct materials    $19
Direct labor          $11
Variable overhead $6
Fixed overhead    $9
                           $45

Hyde Farms Inc. has a capacity of 100,000 units. The are currently producing and selling 90,000 units at $50 per unit. The cost of a unit at the present production level is provided in the analysis above. An order for 10,000 units has just been received from a foreign company at a price of $42 per unit. Freight costs of $2 per unit would be required. If Hyde farms accepts this order the incremental profit/loss on this order would be:
$40,000 profit
$30,000 loss
$80,000 loss
$60,000 profit
$30,000 profit

Question 4 1 pts
Direct materials $14,000
Direct labor $17,000
Other Costs:                         Variable Fixed
Manufacturing overhead $18,000 $12,000
Marketing                               $3,000 $11,000
Administrative                         $7,000 $6,000

In the table above are shown costs incurred during April by Wright Aero-Bikes
The amount classified as product costs would be
$49,000
$30,000
$61,000
$60,000
$31,000

Question 5 1 pts
Standard amount of materials per unit 5 lbs
Standard price of materials $8/lb
Cost of materials purchased $136,000
Amount of materials purchased 16,000 lbs
Amount of materials used 15,000 lbs
Units of product manufactured 3,500

The company determines all variances as early as possible.
The materials price variance was $________. (Select the answer that best matches yours from the list below)

Insufficient data in the problem statement to answer the question
$8,000 favorable
$7,500 unfavorable
$8,000 unfavorable
$1,750 favorable

Question 6 1 pts
A list of account balances for Nicholas Corporation follow:
Revenue and Expenses             January 1 inventories
Purchases of raw materials $140,000       Raw materials $45,000
Direct labor $225,000       Work in process $30,000
Indirect labor $40,000       Finished Goods $105,000
Rent - factory $84,000
Depreciation - machinery $35,000
Insurance - factory $18,000             December 31 inventories
Salesperson's salaries $72,000    Raw materials $40,000
Maintenance - machinery $12,000 Work in process $35,000
Administrative salaries $50,000    Finished goods $110,000
Miscellaneous - factory $26,000
Miscellaneous - office $40,000
Sales revenues $850,000

To answer questions 6 and 7 you will need to prepare an income statement. To get the problems correct you will need to determine the Cost of Goods manufactured and the Cost of Goods Sold. To this requires an understanding of the difference between product and period costs.
Choose the best answer below for your determination of the cost of goods sold
$575,000
$162,000
$580,000
$737,000

Move To... This element is a more accessible alternative to drag & drop reordering. Press Enter or Space to move this question.
Continuing with Nicholas Corporation, what is Nicholas Corporations's Net Income? Choose the best answer below.
$113,000
$97,000
$275,000
$280,000

The Chromosome Manufacturing Company produces two products, X and Y...