Questions -
1. Alpha Company manufactures product ZX29 using $40 of direct materials per unit and $80 of direct labor per unit. Product ZX29 is produced in batches of 50 units per batch. Alpha allocates its overhead costs using an activity-based costing system with 2 cost pools, "labor-related" and "batch-related". The "labor-related" pool is allocated based on direct labor dollars, with an allocation rate of $1.5 per direct labor dollar. The "batch-related" pool is allocated based on the number of batches, with an allocation rate of $2,000 per batch. What is the total cost of producing 1,000 units of product ZX29 (in the long term)?
a. $120,000
b.$240,000
c.$280,00
d. $340,000
2. At current production volume of 10 units, Beta Company has variable costs of $40 per unit and fixed costs of $28 per unit. If production is expected to drop to 8 units in the next period, what is the total cost projected for the next period? (assume that this is a short-term change)
a. $320
b. $348
c. $544
d. $600
3. You are choosing among jobs A, B and C. The annual salary is $50,000 for job A, $60,000 for job B and $70,000 for job C. All three jobs require the same number of hours per week. The opportunity cost of choosing job B is
a.$50,000
b. $60,000
c. $70,000
d. $120,000
4. Target Company has a price of $80 per unit, unit variable cost of $30 per unit, and total fixed cost of $2,000. How many units does it have to sell to earn a target profit of $8,000
a. 100
b. 125
c. 160
d. 200