After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey wondered if it was time to critically analyze overhead costs at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of its overhead. Additional information about overhead follows. Activity Setting up machines Inspecting components Providing utilities Cost $18,750 $ 4,600 $ 9,200 Driver 25 batches 4,600 parts 4,600 machine hours Overhead has been applied to output at a rate of 45% of direct labor costs. The following data pertain to Job 615. Direct materials Direct labor Batches Number of parts Machine hours $2,000 $3,600 5 batches 410 parts 670 machine hours Required: 1. Classify each of its three overhead activities as unit level, batch level, product level, or facility level. Required: 1. Classify each of its three overhead activities as unit level, batch level, product level, or facility level. Setting up machines Inspecting components Providing utilities 2. What is the total cost of Job 615 if Business Solutions applies overhead at 45% of direct labor cost? Total cost 3. What is the total cost of Job 615 if Business Solutions uses activity-based costing? Total manufacturing cost Business Solutions sells upscale modular desk units and office chairs in the ratio of 2:1 (desk unit:chair). The selling prices are $1,240 per desk unit and $490 per chair. The variable costs are $740 per desk unit and $240 per chair. Fixed costs are $143,750. Required: 1. Compute the selling price per composite unit. 2. Compute the variable costs per composite unit. 3. Compute the break-even point in composite units. 4. Compute the number of units of each product that would be sold at the break-even point. Complete this question by entering your answers in the ta Required 1 Required 2 Required 3 Required 4 Compute the selling price per composite unit. Selling price per composite unit Complete this question by entering your answers in ti Required 1 Required 2 Required 3 Required 4 Compute the variable costs per composite unit. Variable costs per composite unit Complete this question by entering your answers in the Required 1 Required 2 Required 3 Required 4 Compute the break-even point in composite units. Break-even point composite units Complete this question by entering your answers in Required 1 Required 2 Required 3 Required 4 ------ Compute the number of units of each product that would be Desk Chairs Unit sales Santana Rey expects sales of Business Solutions's line of computer workstation furniture to equal 300 workstations (at a sales price of $3,300 each) for 2019. The workstations' manufacturing costs include the following. $ Direct materials Direct labor Variable overhead Fixed overhead 720 per unit 310 per unit $ 90 per unit $24,000 per year The selling expenses related to these workstations follow. Variable selling expenses Fixed selling expenses $ 35 per unit $3,600 per year Santana is considering how many workstations to produce in 2019. She is confident that she will be able to sell any workstations in her 2019 ending inventory during 2020. However, Santana does not want to overproduce as she does not have sufficient storage space for many more workstations. Required: 1. Complete the following income statements using absorption costing. 2. Complete the following income statements using variable costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following income statements using variable costing. BUSINESS SOLUTIONS Variable Costing Income Statements 300 Production volume (units) workstations 300 Sales volume (units) workstations 320 workstations 300 workstations Net income (loss) Under variable costing, can a company increase its net income by increasing production? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following income statements using absorption costing. Production volume 300 320 workstations workstations Cost of goods sold: Cost of goods sold per unit Number of workstations sold Total cost of goods sold BUSINESS SOLUTIONS Absorption Costing Income Statements Production volume 300 320 Sales volume - 300 Workstations workstations workstations 00 0 $ 0 $ Under absorption costing, can the difference between production volume and sales volume affect the reported net income (loss)