John's Water Slides makes custom water slides for hotels. On September 1, there were three jobs in process, Jobs 812, 813, and 814. Two more jobs were started during September, Jobs 815 and 816. By September 30, Jobs 812, 814, and 816 were finished. The following data has been collected:

	Job 812	Job 813	Job 814	Job 815	Job 816
9/1 Balance	$615	$830	$945	---	---
Direct materials	750	235	1,280	$200	$915
Direct labor	420	115	560	320	875

Overhead is applied at the rate of 120% of direct labor cost. Jobs are sold at cost plus 60%. Selling and administrative expenses for September totaled $2,950. By September 30, Jobs 812 were 816 are sold, but the customer who ordered Job 814 decided he did not want the slide so it is still in the warehouse. a.What is John's operating income for the month of September?

a.$0

b.$8,206.40

c.$127.40

d.$3,077.40

e.None of these choices are correct.

b. What is the ending balance of Finished Goods if the beginning balance was $0?

a. $5,531.20

b. $3,457

c. $2,785

d. $8,206.40

e. $13,737.60

2.Fame Company manufactures engines. Fame produces all the parts necessary for its engines, except for one electronic component, which is purchased from two local suppliers: Hydra International and Parable Company. Both suppliers are reliable and rarely deliver late. Hydra sells the component for $12.00 per unit, while Parable sells the same component for $10.00. Fame purchases 80% of its components from Parable because of the lower price it offers. The total annual demand is 95,000 units.

I. Activity Data
	Activity Cost
Inspecting components (sampling only)	$ 210,000
Reworking products (due to failed component)	$2,454,000
Warranty work (due to failed component)	$1,923,000

II. Supplier Data
	Hydra	Parable
	International	Company
Unit purchase price	$12.00	$10.00
Units purchased	19,000	76,000
Sampling hours	60	2,600
Rework hours	150	3,800
Warranty hours	550	7,000

a. Calculate the activity rate for reworking products based on rework hours. (Note: Round answer to the nearest dollar.)

a.$605 per hour

b.$602 per hour

c.$595 per hour

d.$622 per hour

e.$621 per hour

b. Calculate the total cost per component associated with using Parable Company as the supplier. (Note: Round the activity rates to the nearest dollar and the cost per component to two decimal places.)

a.$78.92

b.$12.45

c.$86.28

d.$67.24

e.$15.74

3.Eclypso Inc. manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for October is as follows:

Work in process, October 1:
Units (45% complete)	7,200
Direct materials	$42,000
Direct labor	$50,400
Overhead	$14,400

During October, 38,400 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during October:

Direct materials	$144,000
Direct labor	$192,000
Overhead	$60,000

By October 31, the 3,600 units that were 85% complete remained in mixing department. Eclypso uses the weighted average method. Eclypso's cost of goods transferred to the molding department (Note: Round answer to two decimal places.) during October would be:

a.$465,792.

b.$294,000.

c.$261,050.

d.$310,347.

4.Freshy Milk Company produces dairy equipment. Most of its jobs have a number of units per job. The company has two different departments through which all jobs pass. Overhead is applied using a plant wide rate of $15 per direct labor hour. Direct labor wages average $6 an hour. Data for Job #3 for the year is:

Direct materials	$30,000
Direct labor costs
Dept. A	$50,000
Dept. B	10,000
Machine hours used
Dept. A	300 hrs.
Dept. B	3,100 hrs.
Units produced	34,000 units

Compute the cost per unit. (Note: Round the unit cost to two decimal places.)

a.$3.50

b.$7.06

c.$10.05

d.$6.32

e.None of these choices are correct