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Part 1A:

Jemmott Corporation has two divisions: Western Division and Eastern Division. The following report is for the most recent operating period:

	Total Company		Western Division			Eastern Division
Sales	$	406,000	$	188,000		$	218,000
Variable expenses		111,880		63,920			47,960
Contribution margin		294,120		124,080			170,040
Traceable fixed expenses		191,000		85,000			106,000
Segment margin		103,120		39,080			64,040
Common fixed expenses		69,020		31,960			37,060
Net operating income	$	34,100	$	7,120		$	26,980

The common fixed expenses have been allocated to the divisions on the basis of sales.

The companys overall break-even sales is closest to:

Multiple Choice

$271,743

$358,929

$94,243

$264,685

Part 1B:

Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below:

Overhead costs:

Equipment depreciation	$	70,000
Supervisory expense	$	13,300

Distribution of Resource Consumption Across Activity Cost Pools:

	Activity Cost Pools
	Machining	Order Filling		Other
Equipment depreciation	0.50	0.30		0.20
Supervisory expense	0.50	0.20		0.30

In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products.

Activity:

	MHs (Machining)	Orders (Order Filling)
Product W1	6,380	161
Product M0	18,600	981
Total	24,980	1,142

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

Sales and Direct Cost Data:

	Product W1		Product M0
Sales (total)	$	78,700	$	60,100
Direct materials (total)	$	38,200	$	18,400
Direct labor (total)	$	20,800	$	33,700

What is the overhead cost assigned to Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places and your final answer to nearest whole dollar amount.)

Multiple Choice

$41,650

$3,336

$13,991

$10,655

Part 1C:

Jemmott Corporation has two divisions: Western Division and Eastern Division. The following report is for the most recent operating period:

	Total Company		Western Division			Eastern Division
Sales	$	406,000	$	188,000		$	218,000
Variable expenses		111,880		63,920			47,960
Contribution margin		294,120		124,080			170,040
Traceable fixed expenses		191,000		85,000			106,000
Segment margin		103,120		39,080			64,040
Common fixed expenses		69,020		31,960			37,060
Net operating income	$	34,100	$	7,120		$	26,980

The common fixed expenses have been allocated to the divisions on the basis of sales.

The Eastern Divisions break-even sales is closest to:

Multiple Choice

$358,929

$224,385

$183,410

$135,897

Part 1D:

Jemmott Corporation has two divisions: Western Division and Eastern Division. The following report is for the most recent operating period:

	Total Company		Western Division			Eastern Division
Sales	$	406,000	$	188,000		$	218,000
Variable expenses		111,880		63,920			47,960
Contribution margin		294,120		124,080			170,040
Traceable fixed expenses		191,000		85,000			106,000
Segment margin		103,120		39,080			64,040
Common fixed expenses		69,020		31,960			37,060
Net operating income	$	34,100	$	7,120		$	26,980

The common fixed expenses have been allocated to the divisions on the basis of sales.

What is the company's overall net operating income if it operates at the break-even points for its two divisions?

Multiple Choice

$(260,020)

$0

$(69,020)

$34,100

Part 1E:

Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period:

	Total Company		Southern Division			Northern Division
Sales	$	418,000	$	193,000		$	225,000
Variable expenses	$	130,880	$	79,130		$	51,750
Traceable fixed expenses	$	186,000	$	77,000		$	109,000
Common fixed expense	$	79,420	$	36,670		$	42,750

The common fixed expenses have been allocated to the divisions on the basis of sales.

The Southern Divisions break-even sales is closest to:

Multiple Choice

$192,661

$130,508

$386,408

$265,119

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