Question

#10

Meester Corporation has an activity-based costing system withthree activity cost pools--Machining, Order Filling, and Other. Inthe first stage allocations, costs in the two overhead accounts,equipment depreciation and supervisory expense, are allocated tothree activity cost pools based on resource consumption. Data usedin the first stage allocations follow:

Overhead costs:
Equipment depreciation	$	96,000
Supervisory expense	$	8,000

Distribution of Resource Consumption Across Activity CostPools:

	Activity Cost Pools
	Machining	Order Filling		Other
Equipment depreciation	0.30	0.10		0.60
Supervisory expense	0.60	0.10		0.30

Machining costs are assigned to products using machine-hours(MHs) and Order Filling costs are assigned to products using thenumber of orders. The costs in the Other activity cost pool are notassigned to products. Activity data for the company's two productsfollow:

Activity:

	MHs(Machining)	Orders (OrderFilling)
Product M0	4,500	400
Product H2	5,500	600
Total	10,000	1,000

The activity rate for the Order Filling activity cost pool underactivity-based costing is closest to:

$104.00 per order

$8.00 per order

$10.40 per order

$13.33 per order

#11

Stut Corporation, a retailer, plans to sell 28,000 units ofProduct X during the month of August. If the company has 6,000units on hand at the start of the month, and plans to have 9,000units on hand at the end of the month, how many units of Product Xmust be purchased from the supplier during the month?

25,000

28,000

31,000

37,000

#17

Marty's Merchandise has budgeted sales as follows for the secondquarter of the year:

April	$	30,000
May	$	60,000
June	$	50,000

Cost of goods sold is equal to 70% of sales. The company wantsto maintain a monthly ending inventory equal to 120% of the cost ofgoods sold for the following month. The inventory on March 31 wasbelow this target and was only $22,000. The company is nowpreparing a Merchandise Purchases Budget for April, May, andJune.

The desired beginning inventory for June is:

$35,000

$42,000

$50,000

$38,000