Use the following to answer questions 2 - 5: Abracadabra Co. manufactures magic sets. The sales planned for next year are 22,000 sets.

Use the following to answer questions 2 - 5: Abracadabra Co. manufactures magic sets. The sales planned for next year are 22,000 sets. Beginning material inventory is sufficient to produce 5,000 sets. Beginning work in process inventory is 1,000 sets that are 100 percent complete as to materials and 60 percent complete as to labor and overhead; there is no ending inventory. The finished goods inventory has a beginning inventory of 3,000 sets and a target inventory of 5,000 sets for December 31. The sets sell for $75. Direct materials cost $15; direct labor is $10; and manufacturing overhead is $12.2. What will be the total sales for the year?(Points: 10)$1,725,000 $1,650,000 $1,572,000 $1,500,000 3. How many sets will be produced? (Points: 10)20,000 22,000 23,000 24,000 4. What will be the amount of cost of goods sold? (Points: 10)$740,000 $814,000 $851,000 $888,000 5. What will be the total costs of direct materials used during the year? (Points: 10)$360,000 $345,000 $330,000 $315,000 10. Ferguson Molding Company produces custom bottle caps and jar covers for large cosmetic companies. Each customer owns the custom-made molds that are used for the caps and jar covers, so caps are produced only to customer order. Each order requires the setting of molds in molding machines. Two full time mechanics, whose combined total annual salary and benefits are $160,000 per year, are employed setting up and breaking down the molding machines. An order consists of anywhere from 50,000 to 500,000 units. 80 orders were received during the year 2008 for individual custom production runs. The total number of units produced was 8 million.If the company allocates the cost of the setup mechanics based on the number of setups, the setup costs to be allocated to an order of 300,000 Nurturing Face Cream jar covers for Aristedes Cosmetics Company would be: (Points: 10)$4,000 $2,000 $1,000 $0, since this is an indirect cost and cannot be traced to the product in question 16. Processing costs in the billing department of Alfaro Company are a mixture of variable and fixed components. Records indicate that average unit processing costs are $0.50 per account processed at an activity level of 32,000 accounts. When only 22,000 accounts are processed, the total cost of processing is $12,500. Given these data, at a budgeted level of 25,000 accounts: (Points: 10)Processing costs are expected to total $8,750 Fixed processing costs are expected to be $10,400 The variable processing costs are expected to be $0.35 per account processed Processing costs are expected to total $13,000 24. Elite Company has unlimited demand for either Candy Coin or Candy Bars. However, they have a limited capacity of machine hours to produce either product. Candy Coins sells for $10 per unit, has a variable cost of $6 per unit and it takes 6 minutes to produce one unit. Candy Bars sells for $15 per unit, has a variable cost of $3 per unit and it takes 10 minutes to produce one unit. Which of the following decisions would maximize Elite's net income? (Points: 10)Allocate all machine hours to the production of Candy Coins Allocate all machine hours to the production of Candy Bars Allocate 50% of the machine hours to Candy Coins and 50% to Candy Bars Allocate 75% of the machine hours to Candy Coins and 25% to Candy Bars ESSAY 2. (CMA adapted) Mac Company manufactures and sells adjustable canopies that attach to motor homes and trailers. The market covers both new unit purchases as well as replacement canopies. Mac developed its 2000 business plan based on the assumption that canopies would sell at a price of $400 each. The variable costs for each canopy were projected at $200, and the annual fixed costs were budgeted at $100,000. Mac's after-tax profit objective was $240,000; the company's effective tax rate is 40 percent. While Mac's sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For the first five months of the year, only 350 units had been sold at the established price, with variable costs as planned, and it was clear that the 2000 after-tax profit projection would not be reached unless some actions were taken. Mac's president assigned a management committee to analyze the situation and develop several alternative courses of action. The following mutually exclusive alternatives were presented to the president:Alternative 1:Reduce the sales price by $40. The sales organization forecasts that with the significantly reduced sales price, 2,700 units can be sold during the remainder of the year. Total fixed and variable unit costs will stay as budgeted.Alternative 2:Lower variable costs per unit by $25 through the use of less expensive raw materials and slightly modified manufacturing techniques. The sales price will also be reduced by $30, and sales of 2,200 units for the remainder of the year are forecast.Alternative 3:Cut fixed costs by $10,000 and lower the sales price by 5 percent. Variable costs per unit will be unchanged. Sales of 2,000 units are expected for the remainder of the year.Required:(A) If no changes are made to the selling price or cost structure, determine the number of units that Mac Company must sell: (20 of 40 Total Points)(1) in order to break even.(2) to achieve its after-tax profit objective.(B) Determine which one of the alternatives Mac Company should select to achieve its annual after-tax profit objective. Be sure to support your selection with appropriate calculations. (20 of 40 Total Points)