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Louise's Café bakes croissants

Price: $9.99

Problem 1
ACME Co. produced a pilot run of 70 units of a recently developed part used
in the finished products. ACME Co. expects to produce and sell 2,380 units
annually. The pilot run required 20.16 direct labor hours for the 70 units,
averaging .408 direct labor hours per piston. ACME experiences an 80 percent
learning curve on the direct labor hours needed to produce new

Assuming the parts are manufactured by ACME Co., calculate the
average direct labor hours per unit for the first 1,120 parts (including the
pilot run) produced.

Problem 2
ACME Co. is attempting to predict its maintenance costs more accurately.
Maintenance costs are a mixed cost. Maintenance costs and machine hours for the first 4 months of the year are as follows:

Month Maintenance costs Machine Hours
January $8,430 1,320
February 7,620 1,190
March 8,810 1,430
April 7,580 1,130

Using the high-low method, calculate unit variable cost and
monthly fixed costs.

Problem 3
Miller & Associates built a new computer-aided manufacturing facility.
The new facility was designed to produce 300 computers per month. The variable
costs for each computer are $660 and the fixed costs total $74,700 per month.
What is the average cost per unit, if the facility normally expects to operate
at 85 percent of capacity?

Problem 4
Louise's Café bakes croissants that are sold to local restaurants and grocery
stores in the Columbia, South Carolina area. When 600 croissants are baked, the
average cost is $0.70. When 720 croissants are baked, the average cost is $0.65.
What is the total cost when 670 croissants are baked?

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