Blue Spruce Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window at a budgeted volume of 5,040 units are as follows. Per Unit Total Direct materials $ 110 Direct labor $ 70 Variable manufacturing overhead $ 10 Fixed manufacturing overhead $ 151,200 Variable selling and administrative expenses $ 10 Fixed selling and administrative expenses $ 128,520 Blue Spruce Windows uses cost-plus pricing methods that are designed to provide the company with a 25% ROI on its tinted window line. A total of $1,280,160 in assets is committed to production of the new tinted window.

Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?

Gonzales Corp. needs to set a target price for its newly designed product EverReady. The following data relate to this product.                                                   Per Unit              Total Direct Material                                    $20 Direct Labor                                       $40 Variable manufacturing Overhead               $10 Fixed manufacturing overhead                                          $1,200,000 Variable selling and administrative                 $5 Fixed selling and administrative                                      $1,120,000   The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Gonzales uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the accounting department provides information under both approaches using a markup of 50% on absorption cost and a markup of 70% on variable cost.…

Tioga company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information. Lenses Mirrors Units produced Material moves per product line 5 Direct-labor hours per unit The total budgeted material-handling cost is 50,000 Required: 1. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount? 2. Answer the same question as in requirement 1), but for mirrors 3. Under activity-based costing(ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the material-handling activity is the number of material moves 4. Answer the same question as in requirement 3, but for mirrors. 25 25 15…