Problem 1:
West Coast Board Manufacturing Inc. produces and sells surfboards in Southern California. The company expected the followingrevenues and costs in 2018 for its Premium surf boards:
Revenue (750 boards @ $300 per board) $225,000
Variable costs 105,000
Fixed costs 60,000
a) How many sets of clubs must be soldfor Tee Times, Inc. to reach their breakeven point? (show yourcalculation)
b) How many boards must be sold to earn a targetoperating income of $100,000? (show your calculation)
c) What amount of sales must thecompany have to earn a target net income of $100,000 if they have atax rate of 30%? (show your calculation)
Problem 2:
Donna Corporation manufactures custom cabinets for kitchens. Ituses a normal-costing system with two direct-cost categories-directmaterials and direct manufacturing labor-and one indirect-costpool, manufacturing overhead costs. It provides the followinginformation for 2017.
Budgeted manufacturing overhead costs $960,000
Budgeted direct manufacturing labor-hours 32,000 hours
Actual manufacturing overhead costs $992,000
Actual direct manufacturing labor-hours 31,000 hours
Calculate: a) the Budgeted indirect cost rate (show yourcalculation) and b) the total manufacturing costs(show your calculation) of job 102 using normal costingbased on the following information:
Actual direct material costs $3,500
Actual direct manufacturing labor 160 hours
Actual direct manufacturing labor rate $ 20 per hour
