Liberty Box Company calculated an indirect-cost rate of $12.50 per labor hour for fringe benefits for use in their normal costing system. At the end of the year, the actual cost of fringe benefits was $980,000. The total of labor hours worked for the year was the same amount as budgeted, 70,000 hours. If Job #640 required the use of 15 labor hours and the company used the adjusted allocation rate approach, by what amount would the cost of Job #640 change?

Swan Textiles Inc. produces and sells a decorative pillow for $98.00 per unit. In the first month of operation, 2,300 units were produced and 1,800 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes:           Variable manufacturing costs    $23.00 per unit         Variable marketing costs        $6.00 per unit         Fixed manufacturing costs        $15 per unit         Administrative expenses, all fixed        $21.00 per unit         Ending inventories:            Direct materials           -0-            WIP                              -0-            Finished goods           500 units   What is the contribution margin using variable costing? 

Freetown Corporation incurred fixed manufacturing costs of $34,000 during 2017. Other information for 2017 includes:         The budgeted denominator level is 2,000 units.         Units produced total 1,800 units.         Units sold total 1,300 units.         Beginning inventory was zero.   The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.   Operating income using absorption costing will be ________ than operating income if using variable costing. (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

Use the following information for the next three questions. Taylor Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2017: Budgeted manufacturing overhead costs              $3,800,000 Budgeted machine-hours                                           200,000 Actual manufacturing overhead costs                  $3,660,000 Actual machine-hours                                               196,000 What is the budgeted manufacturing overhead rate?    

Decide which of the  properties of a commutative group (closure, identity, inverse, associative, commutative) hold for the given system:   

Which of the following is not true with regards to relevant costs and relevant revenues?

Excellent Manufacturers Inc.  has a current production level of 20,000 units per month. Unit costs at this level are:   Direct materials                                      $0.26 Direct labor                                               0.40 Variable overhead                                    0.16 Fixed overhead                                         0.21 Marketing – fixed                                      0.25 Marketing/distribution – variable            0.42   Current monthly sales are 18,000 units. Jax Company has contacted Excellent about purchasing 1,550 units at $2.00 each. Current sales would NOT be affected by the one-time-only special order, and variable marketing/distribution costs would NOT be incurred on the special order. What is Ratzlaff Company’s change in operating profits if the special order is accepted?

Product-cost cross-subsidization  means that:

When production is less than sales, operating income will be the same regardless of whether variable cost or absorption costing is used.

As product diversity and indirect costs increase, it is usually best to switch away from a broad averaging system to an activity-based cost system.