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Exam 1: Managerial Accounting and Cost Concepts

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Question 71

True/False

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A fixed cost is a cost whose cost per unit varies as the activity level rises and falls.

A) True
B) False

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Question 72

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Streif Inc., a local retailer, has provided the following data for the month of June: -The net operating income for June was:

A) $132,000
B) $126,000
C) $85,000
D) $79,000

E) B) and D)
F) A) and D)

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Question 73

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A manufacturing company prepays its insurance coverage for a three-year period.The premium for the three years is $2,100 and is paid at the beginning of the first year.Sixty percent of the premium applies to manufacturing operations and forty percent applies to selling and administrative activities.What amounts should be considered product and period costs respectively for the first year of coverage?

Given the cost formula Y = $23,000 + $8X,total cost at an activity level of 7,000 units would be:

Administrative costs are indirect costs.

Streif Inc., a local retailer, has provided the following data for the month of June: -The contribution margin for September was:

Bellucci Corporation has provided the following information: The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to:

During the month of May,direct labor cost totaled $10,000 and direct labor cost was 40% of prime cost.If total manufacturing costs during May were $86,000,the manufacturing overhead was:

Given the cost formula,Y = $16,000 + $3.40X,total cost for an activity level of 4,000 units would be:

What would be the total variable cost at an activity level of 5,200 units? Assume that this level of activity is within the relevant range.

Haack Inc.is a merchandising company.Last month the company's cost of goods sold was $84,000.The company's beginning merchandise inventory was $20,000 and its ending merchandise inventory was $18,000.What was the total amount of the company's merchandise purchases for the month?

Dake Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: -For financial reporting purposes,the total amount of product costs incurred to make 4,000 units is closest to:

Lagle Corporation has provided the following information: -For financial reporting purposes,the total amount of product costs incurred to make 4,000 units is closest to:

To the nearest whole cent,what should be the average sales commission per unit at a sales volume of 18,500 units? (Assume that this sales volume is within the relevant range.)

Fassino Corporation reported the following data for the month of November: -The conversion cost for November was:

What would be the average fixed maintenance cost per unit at an activity level of 9,300 machine-hours in a month? Assume that this level of activity is within the relevant range.

The variable cost per unit depends on how many units are produced.

Schwiesow Corporation has provided the following information: -If 6,000 units are produced,the total amount of direct manufacturing cost incurred is closest to:

A partial listing of costs incurred during March at Febbo Corporation appears below: -The total of the product costs listed above for March is:

A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product.