Marsden manufactures a cat food product called special export. marsden currently has 10,000 bags of special export on hand. the variable production costs per bag are $1.80 and total costs are $10,000. the cat food can be sold as it is for $9 per bag or be processed further into prime cat food and feline surprise at an additional $2,000 cost. the additional processing will yield 10,000 bags of prime cat food and 3,000 bags of feline surprise, which can be sold for $8 and $6 per bag, respectively. the net advantage (incremental income) of processing special export further into prime and feline surprise would be:

Speedy auto repairs uses a job-order costing system. the company’s direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics’ hourly wages. speedy’s overhead costs include various items, such as the shop manager’s salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. the company applies all of its overhead costs to jobs based on direct labor-hours. at the beginning of the year, it made the following estimates: direct labor-hours required to support estimated output 20,000 fixed overhead cost $ 350,000 variable overhead cost per direct labor-hour $ 1.00 required: 1. compute the predetermined overhead rate. 2. during the year, mr. wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. the following information was available with respect to his job: direct materials $ 590 direct labor cost $ 109 direct labor-hours used 6