Question 1

Total cost of designing products

Total product design hours

Activity rate for Designing products activity cost pool

(Total cost of designing products / Total activity of designing products)

Question 2

Accounting department costs

Number of employees for production staf

Number of employees for sales staf
Total number of employees to be used for allocation

Accounting department costs per emloyee

Accounting department costs allocated to production

Question 3

Payroll department costs

Number of employees for Molding department

Number of employees for Finishing department
Number of employees for Packaging department department
Total number of employees to be used for allocation

Payroll department cost per employee

Payroll department costs allocated to Molding department

Question 4

Sales price of upgraded keyboard

Sales price of "as is" keyboards
Incremental revenue after upgradation of keyboards

Cost of upgradation of keyboard

Net advantage of re-working the keyboards

Question 5

Total packaging and shipping costs

Total number of boxes to be shipped
Activity rate for packaging and shipping costs
Total Final inspection costs
Total number of items to be shipped
Activity rate for final inspection costs

Total General operations and supervision

Total number of orders to be processed
Activity rate for General operations and supervision

Number of boxes shipped during the period

Shipping departmment costs allocated

Number of items to be shipped

Final inspection costs allocated

Number of orders processed

General operations and supervision allocated

Total cost allocated

Question 6

Cost Pool
Returned check costs
Checking account reconciliation costs
New account setup
Copies of cancelled checks
Online banking web site maintenance

Money market checking

Cost Pool
Returned check costs
Checking account reconciliation costs
New account setup
Copies of cancelled checks
Online banking web site maintenance
Total overhead cost allocated

Total overhead cost allocated to Money market checking

Annual number of accounts
Overhead cost per account for the Money Market Checking

Question 7

Fixed costs
Annual demand (units)
Fixed costs per unit
Variable costs per unit
Total costs per unit
Markup @ 35%
Price per unit

Question 8

Units sold
Price per unit
Variable cost per unit
Contribution margin per unit
Total contribution margin
Total fixed costs
Profit

Price at which at the profit is maximum

Question 10

Cost Pool
Processing electronic orders
Processing non-electronic orders
Picking orders
Packaging orders
Returns
Total annual cost

Number of items ordered

Cost per item ordered

Question 11

Price per unit for special order

Current variable cost per unit

Savings in packaging cost per unit
Variable cost per unit for special order

Contribution margin per unit for special order

Number of special order units

Total contribution margin from special order

Hence, correct answer is "Profit will increase by $80,000".

Question 12
Fixed cost per unit at production volume
Production volume (units)
Total fixed costs
Number of units sold

Fixed costs per unit sold

Variable cost per unit
Total cost per unit
Markup at 42%
Price to be charged

Question 14

Total fixed costs

Reduced demand (units)

Fixed cost per unit

Variable cost per unit
Total cost per unit
Markup at 48%
Price to be charged

Question 15

Selling price of similar product

Required profit at 15%
Target cost per unit

Question 16

Number of orders placed

Cost per order placed
Cost of orders placed

Number of items ordered

Cost per item ordered
Cost of ordering items

Number of items returned

Cost per item returned
Cost of Return

Total indirect costs charged

Total direct costs charged
Markup at 27% of direct costs
Total amount charged

Question 17
Cost Pool
Consultation
Administrative Costs
Client Service

Cost to be charged
Cost Pool
Consultation
Administrative Costs
Client Service
Total overhead charged

Total additional costs charged to this customer

$ 387,300.00
6,510

$ 59.49

$ 184,600

32
17
49

$ 3,767.35

$ 120,555.10

$ 142,000

66
48
23
137

$ 1,036.50

$ 68,408.76

$ 18,000
$ 8,500
$ 9,500

$ 6,700

$ 2,800

$ 165,500
21,200
$ 7.81 per box
 $ 198,000
98,800
$ 2.00 per item

$ 83,900
9,300
$ 9.02 per order

1,372
$ 10,710.66

6000
$ 12,024.29

669
$ 6,035.39

$ 28,770.34

Cost Number of activity Activity rate

$ 2,820,000.00 190,000 $ 14.84
$ 56,000.00 389,000 $ 0.14
$ 650,000.00 59,000 $ 11.02
$ 389,000.00 90,000 $ 4.32
$ 181,000.00 2 $ 90,500.00

Activity rate Number of activities Cost allocated

$ 14.84 18,000 $ 267,157.89
$ 0.14 420 $ 60.46
$ 11.02 15,000 $ 165,254.24
$ 4.32 60,000 $ 259,333.33
$ 90,500.00 1 $ 90,500.00
$ 782,305.93

$ 782,305.93
56,000
$ 13.97

$ 1,900,000.00
138,000
$ 13.77
 $ 39.00
$ 52.77
$ 18.47
$ 71.24

30,000 40,000 50,000 60,000

$ 10 $9 $8 $7
$5 $5 $5 $5
$5 $4 $3 $2
$ 150,000 $ 160,000 $ 150,000 $ 120,000
$ 100,000 $ 100,000 $ 100,000 $ 100,000
$ 50,000 $ 60,000 $ 50,000 $ 20,000

$ 9.00

Annual Cost
$ 1,000,000
$ 2,000,000
$ 3,000,000
$ 1,500,000
$ 2,000,000
$ 9,500,000.00

50,000,000

$ 0.19

$ 300.00

$ 280.00
$ 20.00
$ 260.00

$ 40.00
2,000.00

$ 80,000.00
 $ 4.80
50,000
$ 240,000.00
66,000

$ 3.64
$ 6.80
$ 10.44
$ 4.38
$ 14.82

$ 199,300.00
87,600

$ 2.28
$ 4.80
$ 7.08
$ 3.40
$ 10.47

$ 133.00
$ 19.95
$ 113.05

7
$ 7.60
$ 53.20

292
$ 2.40
$ 700.80

7
$ 29.30
$ 205.10

$ 959.10
$ 2,700.00
$ 729.00
$ 4,388.10
Cost Number of activity Activity rate
$ 190,000.00 100 $ 1,900.00
$ 146,000.00 9,900 $ 14.75
$ 84,000.00 120 $ 700.00

Activity rate Number of activities Cost allocated

$ 1,900.00 2 $ 3,800.00
$ 14.75 130 $ 1,917.17
$ 700.00 1 $ 700.00
$ 6,417.17

$ 6,417.17