Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Direct Materials Conversion Units Completed and transferred out 80,000 80,000 Units in Ending Work in Process: Direct Materials (12,000 * 100%) 12,000 Conversion (12,000 * 70%) 8,400 Equivalent Units of Production 92,000 88,400 Cost per Equivalent Unit Costs of beginning work in process $ 43,000 $ 63,200 Costs incurred this period 144,000 193,600 Total costs $ 187,000 $ 256,800 Cost per equivalent unit $ 2.03 per EUP $ 2.90 per EUP The total conversion costs transferred out of the Canning Department equals: Multiple Choice 1. $256,360. 2. $256,800. 3. $193,600. 4. $187,000. 5. $232,000.

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?