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1.A law firm uses activity-based pricing. The company’s activity pools are as follows:

Cost Pool
Annual Estimated Cost
Cost Driver
Annual Driver Quantity

Consultation
190,000
Number of consultations
100 consultations
Administrative Costs
145,000
Admin labor hours
9,900 labor hours
Client Service
83,000
Number of clients
100 clients
The firm had two consultations with this client and required 130 administrative labor hours. What additional costs will be charged to this customer?

2.Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much?

Sales $50,000 
Variable Costs $7,300 
Fixed Costs $25,000

3.Susan is trying to decide whether or not to attend college during the next 12-week session. She has the following options:

1. Attend college full-time at a cost of $1,200.
2. Attend college part-time at a cost of $600 and work part-time earning $1,600.
3. Work full-time earning $4,900.
What is Susan's incremental profit if she chooses option 3 over option 2?

4.Carry-ALL plans to sell 1,300 carriers next year and has budgeted sales of $46,000 and profits of $22,000. Variable costs are projected to be $20 per unit. Michael Co. offers to pay $24,300 to buy 520 units from Carry-ALL. Total fixed costs are $7,000 per year. This offer does not affect Carry-ALL's other planned operations. The incremental revenues for this situation are

5.Aaron's chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were:
Materials cost
$4,820

Labor cost
2,560

Rent
1,500

Depreciation
2,500

Other fixed costs
3,200

Materials and labor are the only variable costs. If production and sales are budgeted to increase to 130 chairs in August, how much is the expected total variable cost on the August budget?

6.Total costs were $79,300 when 25,000 units were produced and $99,000 when 38,000 units were produced. Use the high-low method to find the estimated total costs for a production level of 32,000 units.

7.A company using activity based pricing marks up the direct cost of goods by 0.24 plus charges customers for indirect costs based on the activities utilized by the customer. Indirect costs are charged as follows: $7.30 per order placed; $3.20 per separate item ordered; $27.80 per return. A customer places 10 orders with a total direct cost of $3,000, orders 289 separate items, and makes 8 returns. What will the customer be charged?

8.U.S. Telephone Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling commission of 10% (based on the unit sales price per phone). Fixed manufacturing costs total $1,010 per month, while fixed selling and administrative costs total $2,200. How many phones must be sold to achieve the breakeven point?

9.Ritz Furniture has a contribution margin ratio of 0.17. If fixed costs are $165,000, how many dollars of revenue must the company generate in order to reach the break-even point?

10.Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $71,200. Swimkids expects sales of $262,800 next year. What is Swimkids's margin of safety?