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Exam 1: Managerial Accounting and Cost Concepts

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Question 31

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Which of the following statements is correct in describing manufacturing overhead?

A) Manufacturing overhead when combined with direct materials cost forms conversion cost.
B) Manufacturing overhead consists of all manufacturing cost except for prime cost.
C) Manufacturing overhead is a period cost.
D) Manufacturing overhead when combined with direct labor cost forms prime cost.

E) C) and D)
F) B) and D)

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Question 32

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Arman Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units, its average costs per unit are as follows: Required: a.If 6,000 units are produced, what is the total amount of fixed manufacturing cost incurred? b.If 6,000 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis? c.If 4,000 units are produced, what is the total amount of direct manufacturing cost incurred? d.If 4,000 units are produced, what is the total amount of indirect manufacturing cost incurred?

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a. _TB2627_00 b. _TB2627_00 *The average...

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Question 33

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In a traditional format income statement, the gross margin minus selling and administrative expenses equals net operating income.

The contribution margin for June is:

When operations are interrupted or cut back, committed fixed costs are cut in the short term because the costs of restoring them later are likely to be far less than the short-run savings that are realized

The three cost elements ordinarily included in product costs are direct materials, direct labor, and manufacturing overhead.

The cost of direct materials is classified as a:

If 5,000 units are sold, the total variable cost is closest to:

If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to:

The gross margin for December is:

Menk Corporation has provided the following information: Required: a.If 5,000 units are sold, what is the variable cost per unit sold? b.If 5,000 units are sold, what is the total amount of variable costs related to the units sold? c.If 5,000 units are produced, what is the total amount of manufacturing overhead cost incurred?

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:

All of the following can be differential costs except:

If 4,000 units are sold, the variable cost per unit sold is closest to:

Abburi Company's manufacturing overhead is 60% of its total conversion costs.If direct labor is $52,000 and if direct materials are $28,000, the manufacturing overhead is:

Phaup Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units, its average costs per unit are as follows: For financial reporting purposes, the total amount of period costs incurred to sell 5,000 units is closest to:

Mark purchased a machine two years ago to make experimental boards.The machine will be used to manufacture the new board.The cost of this machine is:

Which of the following production costs, if expressed on a per unit basis, would be most likely to change significantly as the production level varies?

The following data have been collected for four different cost items. Which of the following classifications of these cost items by cost behavior is correct?

A number of costs and measures of activity are listed below. Required: For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.