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40. Bradbo owned two adjoining restaurants, the Pork Palace and the Chicken Hut. Each
restaurant was treated as a profit center for performance evaluation purposes. Although the
restaurants had separate kitchens, they shared a central baking facility. The principal costs of the
baking area included materials, supplies, labor, and depreciation and maintenance on the
equipment.
Bradbo allocated the monthly costs of the baking facility to the two restaurants based on the
number of tables served in each restaurant during the month using dual allocation and equal
sharing of fixed costs. In April, the costs were $30,000, of which $16,000 were fixed. The Pork
Palace served 4,400 tables, while the Chicken Hut served 3,600 tables.
The amount of the joint cost that should have been allocated to the Chicken Hut in April is
calculated to be:
41. Organic Laboratories allocates research and development costs to its three research
facilities based on each facility's total annual revenue from new product developments:
Facility location Kentucky Arizona Illinois Total
New product revenue $56,000,00 $100,000,000 $84,000,000 $240,000,000
Research & Development $60,000,000
Using revenue as an allocation base, the amount of costs allocated to the Kentucky research
facility is calculated to be:
42. Organic Laboratories allocates research and development costs to its three research
facilities based on each facility's total annual revenue from new product developments:
Facility location Kentucky Arizona Illinois Total
New product revenue $56,000,00 $100,000,000 $84,000,000 $240,000,000
Research & Development $60,000,000
Using revenue as an allocation base, the amount of costs allocated to the Arizona research
facility is calculated to be:
43. Organic Laboratories allocates research and development costs to its three research
facilities based on each facility's total annual revenue from new product developments:
Facility location Kentucky Arizona Illinois Total
New product revenue $56,000,00 $100,000,000 $84,000,000 $240,000,000
Research & Development $60,000,000
Using revenue as an allocation base, the amount of costs allocated to the Illinois research
facility is calculated to be:
44. Todweed Academy allocates marketing and administrative costs to its three schools
based on total annual tuition revenue for the schools:
School Lower
School Middle
School Upper
School
Total
Tuition revenue $1,000,000 $800,000 $1,200,000 $3,000,000
Marketing and administrative $1,200,000
Using revenue as an allocation base, the amount of costs allocated to the Lower School is
calculated to be:
45. Todweed Academy allocates marketing and administrative costs to its three schools
based on total annual tuition revenue for the schools:
School Lower
School Middle
School Upper
School
Total
Tuition revenue $1,000,000 $800,000 $1,200,000 $3,000,000
Marketing and administrative $1,200,000
Using revenue as an allocation base, the amount of costs allocated to the Middle School is
calculated to be:
46. Todweed Academy allocates marketing and administrative costs to its three schools
based on total annual tuition revenue for the schools:
School Lower
School Middle
School Upper
School
Total
Tuition revenue $1,000,000 $800,000 $1,200,000 $3,000,000
Marketing and administrative $1,200,000
Using revenue as an allocation base, the amount of costs allocated to the Upper School is
calculated to be:
47. Zhender Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit.
Budgeted production in both 2015 and 2016 was 3,000 units. There was no beginning inventory in
2015. The following data summarized the 2015 and 2016 operations:
2015 2016
Units sold 2,500 3,200
Units produced 3,000 3,000
Costs:
Variable factory overhead per unit $0.65 $0.65
Fixed factory overhead $1,290 $1,290
Variable marketing per unit $0.80 $0.80
Fixed Selling and Administrative $650 $650
Full costing operating income for 2015 is calculated to be:
48. Zhender Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit.
Budgeted production in both 2015 and 2016 was 3,000 units. There was no beginning inventory in
2015. The following data summarized the 2015 and 2016 operations:
2015 2016
Units sold 2,500 3,200
Units produced 3,000 3,000
Costs:
Variable factory overhead per unit $0.65 $0.65
Fixed factory overhead $1,290 $1,290
Variable marketing per unit $0.80 $0.80
Fixed Selling and Administrative $650 $650
Full costing operating income for 2016 is calculated to be:
49. Zhender Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit.
Budgeted production in both 2015 and 2016 was 3,000 units. There was no beginning inventory in
2015. The following data summarized the 2015 and 2016 operations:
2015 2016
Units sold 2,500 3,200
Units produced 3,000 3,000
Costs:
Variable factory overhead per unit $0.65 $0.65
Fixed factory overhead $1,290 $1,290
Variable marketing per unit $0.80 $0.80
Fixed Selling and Administrative $650 $650
Variable costing operating income for 2015 is calculated to be:
50. Zhender Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit.
Budgeted production in both 2015 and 2016 was 3,000 units. There was no beginning inventory in
2015. The following data summarized the 2015 and 2016 operations:
2015 2016
Units sold 2,500 3,200
Units produced 3,000 3,000
Costs:
Variable factory overhead per unit $0.65 $0.65
Fixed factory overhead $1,290 $1,290
Variable marketing per unit $0.80 $0.80
Fixed Selling and Administrative $650 $650
Variable costing operating income for 2016 is calculated to be:
51. Writer One Inc. manufactures ball point pens that sell at wholesale for $0.80 per unit.
Budgeted production in both 2015 and 2016 was 8,000 units. There was no beginning inventory in
2015. The following data summarized the 2015 and 2016 operations:
2015 2016
Units sold 6,500 9,000
Units produced 8,000 8,000
Costs:
Variable factory overhead per unit $0.20 $0.20
Fixed factory overhead $1,200 $1,200
Variable marketing per unit $0.30 $0.30
Fixed Selling and Administrative $320 $320
Full costing operating income for 2015 is calculated to be:
52. Writer One Inc. manufactures ball point pens that sell at wholesale for $0.80 per unit.
Budgeted production in both 2015 and 2016 was 8,000 units. There was no beginning inventory in
2015. The following data summarized the 2015 and 2016 operations:
2015 2016
Units sold 6,500 9,000
Units produced 8,000 8,000
Costs:
Variable factory overhead per unit $0.20 $0.20
Fixed factory overhead $1,200 $1,200
Variable marketing per unit $0.30 $0.30
Fixed Selling and Administrative $320 $320
Full costing operating income for 2016 is calculated to be:
53. Writer One Inc. manufactures ball point pens that sell at wholesale for $0.80 per unit.
Budgeted production in both 2015 and 2016 was 8,000 units. There was no beginning inventory in
2015. The following data summarized the 2015 and 2016 operations:
2015 2016
Units sold 6,500 9,000
Units produced 8,000 8,000
Costs:
Variable factory overhead per unit $0.20 $0.20
Fixed factory overhead $1,200 $1,200
Variable marketing per unit $0.30 $0.30
Fixed Selling and Administrative $320 $320
Variable costing operating income for 2015 is calculated to be:
