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Quiz2 Answers (3346M_2013Winter): Total 16 marks

Question 1: 8 marks
1. Answer: d (1 mark)
2. Answer: c (2 marks)
single = ($20,000 + {700,000 * 0.02}) / 1,000) * 25 = $850;
dual = ($20,000 / 1,000 * 25) + (15,000 * $0.02) = $800

3. Answer: d (1 mark)
4. Answer: a (1 mark)
5. Answer: c (1 mark)
6. Answer: c (2 marks)
Rank for support departments:
Maintenance to Power 20%*$99,000 = $19,800;
Power to Maintenance 10%*$54,000 =$5,400
Maintenance is ranked first.
Maintenance allocated to School of Education
$99,000 * 30% = $29,700;
Power allocated to School of Education [($99,000 * 20%) + 54,000] * 20%/(20%+70%) = $16,400
Total
$46,100

Question 2 (8 marks)
a. Physical output method: (2 marks)
Regular: 60% of $60,000 = $36,000 (1 mark)
Premium: 40% of $60,000 = $24,000 (1 mark)
b. Net realizable value method: (4 marks)
NRV regular $14 x (60% x 12,000)
NRV premium $17 x (40% x 12,000)
Total NRV
Allocation:
Regular $100,800/$182,400) x $60,000
Premium $81,600/$182,400 x $60,000
Total
c. (2 marks)
Old contribution = $15 $1 = $14 (0.5 mark)
New contribution = $28 $1 $11 = $16 (1 mark)
The company should process further. (0.5 mark)

$100,800 (1 mark)
81,600 (1 mark)
$182,400
$33,158 (1 mark)
26,842 (1 mark)
$60,000