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2-17
1. Costs
Direct variable: yeast, flour, packaging materials
Indirect variable: depreciation on ovens, depreciation on mixing machines, factory utilities, machine maintenance personnel, maintenance supplies, cleaning supplies Direct fixed: finishing department hourly laborers, materials handlers in each department, machinist Indirect fixed: rent on factory building, fire insurance on factory building, mixing department manager, custodian in factory, night guard in factory 2. If the cost object were the mixing department rather than units of production of each kind of bread the mixing department manager would be a direct cost instead of an indirect cost.

2-24
a. Design of products and processes
b. Production
c. Marketing
d. Distribution
e. Customer service

1. Identify customer needs- e
Perform market research-c
Design a prototype-a
Market the new design- c
Manufacture the HCP smartphone-b
Process orders-d
Package the HCP-d
Deliver the HCP-d
Provide online assistance-e
Make design changes-a
2.
Cost drivers:| Activities: |
Number of smartphones shipped by HCP| Process orders from cell phone companies| Number of design changes| Make design changes to the smartphone based on customer feedback| Number of deliveries made to cell phone companies| Process orders from cell phone companies| Engineering hours spend on initial product design| Design a prototype of the HCP smartphone| Hours spent researching competing market brands| Perform market research on competing brands| Customer-service hours| Identify customer needs, provide online assistance to cell phone users for use of the HCP smartphone | Number of smartphone orders processed| Process orders from cell phone companies| Number of cell phone companies purchasing the HCP| Market the new design to cell phone companies| Machine hours required to run the production equipment| Manufacture the HCP smartphone| Number of surveys returned and processed from the competing users| Identify customer needs|

2-33
1.
Direct materials
Beginning inventory65000
Purchase of dm128000
Cost of direct materials193000
Ending inventory34000
Direct materials used159000

Direct manufacturing labor106000

Manufacturing overhead
Indirect manu. labor48000
Plant insurance2000
Plant utilities12000
Depreciation-p,b,e21000
Repairs & maint.8000
Equipment leasing32000
Total manu. overhead costs123000

Manufacturing cost incurred during 2011388000
Beginning wip 201183000
Total manu. Costs to account471000
Ending wip72000
Costs of good manufactured399000

2.
Revenue600000000
Costs of goods sold
Beginning finished goods123000
Cost of goods manufactured399000
Cost of goods avail. for sale522000
Ending finished goods102000
Costs of goods sold 420000

Gross margin599580000

Operating costs:
Mkting, dist., and cust. service62000
General & admin. cost34000
Total operating costs 96000
Operating income599484000

3-27
1. BEP= 15000000/(1.5*175)(1*50)=48000 units

2. Operating income=(quantity)*(cm)-fixed cost
= (220000)*(312.5)-15000000
=$53750000

3. A. BEP=15000000/(1*1.75)(1.5*50)=60000 units
B. BEP=15000000/(4*1.75)(1*50)=20000 units
C. If the new customers increase and the upgrade customers decrease, bep decreases. If the new customers decrease and upgrade customers increase, bep increases.

3-28
1. bep 4 coffee/ 1 bagel
coffee bagel
selling price2.50 3.75
product ingredients .25.50
hourly sales staff .50 1.00
packaging .50.25
cm/unit1.252.00

fixed costs 5000
2000
CM(bundle)= (4*1.25)(1*2.00)=$7.00
bep=FC/CM=7000/7= 1000 bundles

Revenue=(2.5*4000)+(3.75*1000)
= $13750
VC=(1.25*4000)+(1.75*1000)=$6750
CM=13750+6750=7000
FC=7000...
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