# Acc212 Chapter22-24

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ACC212 Chapter 22 1. We sell peaches that sell for different amounts based on their quality. #1 sell for \$1.50 per lb.; #2 sell for \$1.00 per lb. and #3 sell for \$0.20 per lb. We can sell 300,000 Ibs. of#1, 300,000 Ibs. of #2 and 750,000 Ibs. of #3. Our total costs of producing the peaches are \$472,500. Required: a. How much of the cost should be allocated to each quality of peach? b. How much is the cost per pound of peaches? 2. Alpha company has 4 departments. A & B are support departments, 1 & 2 are selling departments. Use the following information to complete the Departmental Expenses Allocation Spreadsheet and the supporting schedules. Sales Payroll expenses Square footage # of employees…show more content…
B are allocated based on total number of employees as follows: |# employees | ||Cost | Oept. 1 |10 |.40 |\$ |9,400 | Oept. 2 |15 |.60 ||14,100 | Total |25 |1.00 |\$23,500 | 3 a. Return on Assets (Investment) Net Income/Average Total assets Bruce = (\$205,000-189,000) / \$300,000 = 5.3 Wayne = (\$270,000-232,000) / \$290,000 = 13.1 Residual Income Net income/target net income on assets Bruce: RI = \$16,000 - (.10)(\$300,000) = \$(14,000) Wayne: RI = \$38,000 - (.10)(\$290,000) = \$9,000 b. Wayne should get the promotion because he is generating a greater percentage return on the assets of his division and it is higher than the target specified. He appears to be earning a superior return with fewer assets. Chapter 23 1. Sale of repaired units (5,000 x \$33) \$165,000 Sale of defective units(5,OOO x \$18) (90,000) Incremental revenue from repair \$ 75,000 Cost to repair the units (\$10 x 5,000) (50,000) Incremental income from repairing the \$ 25.000 units 2. |A||B |C| Sales price per unit |\$22.00 ||\$34.00 |\$46.00 | Variable costs per unit |(10.00)|| (19.00)| (25.30)| ||||| Contribution margin per unit |\$ 12.00 ||\$15.00 |\$20.70 | Divided by machine hours/unit |.75 ||1.2 |2.3 | ||||| Contribution/machine hour |S 16.00 |S |12.50 |S 9.00 | In general, the company should produce Product A first, then B, and finally C. Specifically: a. If no market constraints exist on any of the products, produce as much A