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4.

A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $3,780 and is paid at the beginning of the first year. Eighty percent of the premium applies to manufacturing operations and 20% applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage?

Product

Period

	$3,780 $0
	$3,024 $756
	$2,016 $504
	$1,008 $252

5.

Ladanza Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $154.00 per unit.

Sales volume (units)	14,300	15,880
Cost of sales	$1,144,000	$1,270,400
Selling and administrative costs	$655,000	$683,440

The best estimate of the total contribution margin when 15,540 units are sold is:

	$248,970
	$984,270
	$336,170
	$870,240

6.

Carbaugh Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.

Production volume	4,400	units	5,400	units
Direct materials	$77.90	per unit	$77.90	per unit
Direct labor	$50.20	per unit	$50.20	per unit
Manufacturing overhead	$74.30	per unit	$68.30	per unit

The best estimate of the total cost to manufacture 5,100 units is closest to: (Do not round intermediate calculations.)

	$1,016,265
	$1,009,560
	$1,027,440
	$978,270

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