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ACC349 Week 3 Team P4-3A P4-4A BYP4-2

Price: $8.99

P4-3A Stellar Stairs Co. of Poway designs and builds factory-made premium wooden
stairs for homes. The manufactured stair components (spindles, risers, hangers, hand
rails) permit installation of stairs of varying lengths and widths. All are of white oak
wood. Its budgeted manufacturing overhead costs for the year 2006 are as follows.

Overhead Cost Pools Amount
Purchasing $ 57,000
Handling materials 82,000
Production (cutting, milling, finishing) 210,000
Setting up machines 85,000
Inspecting 90,000
Inventory control (raw materials and finished goods) 126,000
Utilities 180,000
Total budget overhead costs $830,000

and so on ...

P4-4A Mendocino Corporation produces two grades of wine from grapes that it buys
from California growers. It produces and sells roughly 3,000,000 liters per year of a lowcost,
high-volume product called CoolDay. It sells this in 600,000 5-liter jugs. Mendocino
also produces and sells roughly 300,000 liters per year of a low-volume, high-cost product
called LiteMist. LiteMist is sold in 1-liter bottles. Based on recent data, the CoolDay
product has not been as profitable as LiteMist. Management is considering dropping
the inexpensive CoolDay line so it can focus more attention on the LiteMist product.
The LiteMist product already demands considerably more attention than the CoolDay

and so on ...

BYP 4-2 Ideal Manufacturing Company of Sycamore, Illinois has supported a research
and development (R&D) department that has for many years been the sole contributor to
the company’s new farm machinery products. The R&D activity is an overhead cost center
that provides services only to in-house manufacturing departments (four different product
lines), all of which produce agricultural/farm/ranch related machinery products

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