Canyon City Co. uses a job order costing system that combines actual direct material and actual direct labor costs with a predetermined overhead charge based on machine hours. Expected overhead and machine hours of $1,421,000 and 145,000, respectively, were used in developing the predetermined rate for 2010. During 2010, the company worked on Job #876 and incurred the following costs and machine hours:
Direct material ……………$47,500
Direct labor ……………… 21,800
Machine hours ……………. 325
a. What is the total cost of Job #876? What is the cost per unit if 1,500 units were made? (Round to the nearest cent.)
b. In completing Job #876, 30 units were defective and had to be reworked at a cost of $25 each. Assume that spoilage and rework costs were included in the original estimated overhead costs. Where does the $750 rework cost appear in the accounts of Canyon City Co.?
c. Disregard the facts in (b). Upon completing Job #876, the quality control inspector determined that 30 units were spoiled and would be unacceptable to the customer. Thirty additional good units were made at a total cost of $1,390. The spoiled units were sold for $240 as ?oseconds?? to an outlet store. What is the total cost of Job #876?

At a student café, there are equal numbers of two types of customers with the following values. the café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). students with early classes students without early classes coffee 70 60 banana 51 101 the marginal cost of coffee is 10 and the marginal cost of a banana is 40. the café owner is considering three pricing strategies: 1. mixed bundling: price bundle of coffee and a banana for 161, or just a coffee for 70. 2. price separately: offer coffee at 60, price a banana at 101. 3. bundle only: coffee and a banana for 121. do not offer goods separately. assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle. for simplicity, assume there is just one student with an early class, and one student without an early class. price strategy revenue from pricing strategy cost from pricing strategy profit from pricing strategy 1. mixed bundling $ $ $ 2. price separately $ $ $ 3. bundle only $ $ $ pricing strategy yields the highest profit for the café owner.