Ayayai Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Units 2,000 2,500 Sales $48,000 $20,000 Variable costs 19,200 11,000 Fixed costs 8,000 4,200 Net income $20,800 $4,800 Yards of leather per unit 1.25 0.30 Net income per unit $10.40 $1.92 Unit contribution margin $14.40 $3.60 Assume that Ayayai is able to order an additional 2,000 yards of leather and wishes to maximize its net income. Of the additional units it produces, at least 400 of each product are necessary for sales. How many units of each must be produced? (Round contribution margin per yard to 2 decimal places, e.g. 52.75 and final answers to O decimal places, e.g. 5,275.)

Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below:     Xtreme Pathfinder Selling price per unit $ 120.00   $ 87.00   Direct materials per unit $ 65.20   $ 51.00   Direct labor per unit $ 11.20   $ 8.00   Direct labor-hours per unit 1.4 DLHs 1.0 DLHs Estimated annual production and sales 30,000 units 65,000 units   The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:   Estimated total manufacturing overhead $ 2,033,000   Estimated total direct labor-hours 107,000 DLHs   Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based costing…

1. Motor Division makes a motor that it sells to customers outside of the company. Data concerning this motor appear below: Selling Price to Outside Customers Variable Cost per Unit Total Fixed Costs Capacity in Units $ 250 180 $10,000 30,000 $ Consumer Division of the same company would like to use the motor manufactured by Motor Division in one of its products. Consumer Division currently purchases the part made by an outside company for $225 per unit. Consumer Division requires 3,000 units of the motor each period. Motor Division is currently selling 30,000 units to outside customers. If Motor Division sells to Consumer Division rather than to outside customers, the variable cost per unit would be $5 lower. What should be the lowest acceptable transfer price from the perspective of the Motor Division? A) B) C) D) E) $250. $175 $245. $180. $225

3C AND 3D