The following cost information pertained to the Cello Division of Symphony Strings Company and was based on monthly demand and sales of 100 units:   Per-Unit Costs   Variable production costs:     Direct materials$ 170    Direct labor200    Variable factory overhead110    Fixed production costs:     Depreciation (equipment)70    Factory rent98    Other22    Total production cost$ 670    Variable selling and administrative costs$ 34per unit   Fixed selling and administrative costs$ 46per unit1) Assume that the Cello Division was evaluating whether it would accept a special sales order for 35 cellos at $550 per unit. For this purpose, total relevant cost per unit (given the costs stated above) is___________

4) What are the advantages and drawbacks of high-low method?

A capital project requires a $150,000 initial investment. The firm’s cost of capital (WACC) is 10 percent (after-tax), and the present value of the expected after-tax cash inflows from the project is $148,000. Should the firm accept the independent project?

Split Corporation manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on the relative sales values of the products at the split-off point. Additional information is as follows:    X Y Z Total   Allocated joint costs $ 200,000 $ 200,000 $ 400,000 $ 800,000   Sales value at split-off 300,000 300,000 600,000 1,200,000   Additional costs for further processing 83,000 75,000 52,000 210,000   Sales value if processed further 607,000 504,000 466,000 1,577,000  Based solely on a relevant cost analysis, which of the three products should be processed by Split beyond the split-off point?

Crossover Incorporated produces two basic types of video games, SwishSwish and CrunchCrunch. Pertinent data follow (DLH = direct labor hour):    SwishSwish CrunchCrunch   Sales price (per unit) $ 350 $ 278   Costs (per unit):       Direct materials 78 42   Direct labor 58 82   Variable factory overhead (@ $15 per DLH) 60 30   Allocated fixed factory overhead (based on DLHs) 24 12   Marketing expenses (all variable) 46 35   Total costs 266 201   Operating income (per unit) $ 84 $ 77There is insufficient labor capacity (i.e., DLHs) in the plant to meet the combined demand for both SwishSwish and CrunchCrunch. Both products are produced through the same production departments.3) In view of the labor shortage, which of the two products is most profitable, and how much is the contribution margin, per DLH?

Crossover Incorporated produces two basic types of video games, SwishSwish and CrunchCrunch. Pertinent data follow (DLH = direct labor hour):    SwishSwish CrunchCrunch   Sales price (per unit) $ 350 $ 278   Costs (per unit):       Direct materials 78 42   Direct labor 58 82   Variable factory overhead (@ $15 per DLH) 60 30   Allocated fixed factory overhead (based on DLHs) 24 12   Marketing expenses (all variable) 46 35   Total costs 266 201   Operating income (per unit) $ 84 $ 77 There is insufficient labor capacity (i.e., DLHs) in the plant to meet the combined demand for both SwishSwish and CrunchCrunch. Both products are produced through the same production departments.1) What is the contribution margin per unit for each types of video games?

Nailor Company is accumulating data to use in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested the use of linear regression to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis follow:  MonthMaintenance Cost (Y)Machine Hours (X)   January$ 4,700680   February3,500520   March4,100600   April3,320500   May4,850700   June3,460510   July3,530520   August4,970760   September4,760690   October4,550670   November3,800550   December3,660540     a (intercept)$ 3.86   b (coefficient)6.7892   Standard error of the estimate83.417   R-squared0.9838   t-value for b24.6682) Based on the data derived from the regression analysis, 400 maintenance hours in a month means that maintenance costs should be budgeted to the nearest dollar at:

Nailor Company is accumulating data to use in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested the use of linear regression to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis follow:  MonthMaintenance Cost (Y)Machine Hours (X)   January$ 4,700680   February3,500520   March4,100600   April3,320500   May4,850700   June3,460510   July3,530520   August4,970760   September4,760690   October4,550670   November3,800550   December3,660540     a (intercept)$ 3.86   b (coefficient)6.7892   Standard error of the estimate83.417   R-squared0.9838   t-value for b24.6683) The number determining the reliability of the regression equation for the maintenance activities is:

The sequence of phases in the product or service’s life in the market – from the introduction of the product or service to the growth in sales and finally maturity, decline, and withdrawal from the market is the:

Maintenance expenses of a company are to be analyzed to construct a flexible budget. Examination of past records disclosed the following costs and volume measures:   HighestLowest   Cost per month$ 42,000$ 34,000   Machine hours46,00030,0002) Using the high-low technique, estimate the annual fixed cost for maintenance expenditures ________