Question 1

The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below:
  On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed.
-The contribution margin for the University Store for the first quarter is:

Accepted Answer

A)   $660,000
B)   $700,000
C)   $180,000
D)   $140,000E) A) and B)
F) C) and D)

Question 2

Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost,where X is machine-hours.The August budget is based on 8,000 hours of planned machine time.Maintenance cost expected to be incurred during August is:

Accepted Answer

A)   $10,100
B)   $4,800
C)   $500
D)   $5,300E) A) and C)
F) B) and D)

Question 3

Contribution margin is:

Accepted Answer

A)   Sales less cost of goods sold.
B)   Sales less variable production, variable selling, and variable administrative expenses.
C)   Sales less variable production expense.
D)   Sales less all variable and fixed expenses.E) A) and B)
F) A) and C)

Question 4

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

Accepted Answer

A)   $16.75
B)   $12.85
C)   $11.90
D)   $14.70E) A) and C)
F) All of the above

Question 5

Fanelli Corporation,a merchandising company,reported the following results for July:
  Cost of goods sold is a variable cost in this company.
Required:
a.Prepare a traditional format income statement for July.
b.Prepare a contribution format income statement for July.

Accepted Answer

a.Traditional Format Income Statement
  b.Contribution Format Income Statement

Question 6

To the nearest whole dollar,what should be the total property taxes at a sales volume of 37,200 units? (Assume that this sales volume is within the relevant range.)

Accepted Answer

A)   $725,680
B)   $733,400
C)   $749,172
D)   $717,960E) B) and C)
F) None of the above

Question 7

At an activity level of 7,200 machine-hours in a month,Falks Corporation's total variable production engineering cost is $556,416 and its total fixed production engineering cost is $226,008.What would be the total production engineering cost per unit,both fixed and variable,at an activity level of 7,300 machine-hours in a month? Assume that this level of activity is within the relevant range.

Accepted Answer

A)   $107.93
B)   $107.18
C)   $108.67
D)   $108.24E) B) and C)
F) C) and D)

Question 8

Differential costs can:

Accepted Answer

A)   only be fixed costs.
B)   only be variable costs.
C)   be either fixed or variable.
D)   be sunk costs.E) A) and B)
F) C) and D)

Question 9

Dizzy employees a certified operator for each of its 35 rides.Each operator is paid $20 per hour.The cost of the certified operators would best be described as a:

Accepted Answer

A)   fixed cost
B)   mixed cost
C)   step-variable cost
D)   true variable costE) A) and C)
F) B) and C)

Question 10

Which of the following costs is classified as both a prime cost and a conversion cost?

Accepted Answer

A)   Direct materials.
B)   Direct labor.
C)   Variable overhead.
D)   Fixed overhead.E) None of the above
F) B) and C)

Question 11

A decrease in production will ordinarily result in a decrease in fixed production costs per unit.

Accepted Answer

A) True 
 B)False  False

Question 12

Which of the following is an example of a period cost in a company that makes clothing?

Accepted Answer

A)   Fabric used to produce men's pants.
B)   Advertising cost for a new line of clothing.
C)   Factory supervisor's salary.
D)   Monthly depreciation on production equipment.E) B) and D)
F) None of the above

Question 13

Fasheh Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows:
 
-If 10,000 units are produced,the total amount of manufacturing overhead cost is closest to:

Accepted Answer

A)   $180,500
B)   $134,500
C)   $157,500
D)   $146,000E) None of the above
F) A) and B)

Question 14

The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below:
  On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed.
-If 25,000 books are sold during the second quarter and this activity is within the relevant range,the company's expected contribution margin would be:

Accepted Answer

A)   $875,000
B)   $300,000
C)   $175,000
D)   $65,000E) B) and C)
F) A) and D) C

Question 15

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?

Accepted Answer

The answer of Menk Corporation has provided the following information:
...

Question 16

If Lonnie were to sell 50,000 units,the total expected cost per unit would be:

Accepted Answer

A)   $2.20
B)   $2.30
C)   $2.50
D)   $2.00E) None of the above
F) A) and D)

Question 17

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year:
 
-What is the total of the direct costs above?

Accepted Answer

A)   $65,000
B)   $112,000
C)   $155,000
D)   $202,000E) B) and D)
F) B) and C)

Question 18

Which of the following statements about product costs is true?

Accepted Answer

A)   Product costs are deducted from revenue when the production process is completed.
B)   Product costs are deducted from revenue as expenditures are made.
C)   Product costs associated with unsold finished goods and work in process appear on the balance sheet as assets.
D)   Product costs appear on financial statements only when products are sold.E) None of the above
F) A) and C)

Question 19

Ouelette 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:
 If 6,000 units are produced,the total amount of indirect manufacturing cost incurred is closest to:

Accepted Answer

A)   $15,000
B)   $22,800
C)   $7,800
D)   $25,800E) A) and B)
F) A) and C)

Question 20

Adens 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:
 
-If 5,000 units are sold,the variable cost per unit sold is closest to:

Accepted Answer

A)   $13.00
B)   $10.60
C)   $12.10
D)   $15.40E) None of the above
F) B) and D)

Exam 1: Managerial Accounting and Cost Concepts

Correct Answer
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Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost,where X is machine-hours.The August budget is based on 8,000 hours of planned machine time.Maintenance cost expected to be incurred during August is:

Correct Answer
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Contribution margin is:

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

Correct Answer
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Fanelli Corporation,a merchandising company,reported the following results for July: Cost of goods sold is a variable cost in this company. Required: a.Prepare a traditional format income statement for July. b.Prepare a contribution format income statement for July.

Correct Answer
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a.Traditional Format Income Statement 11ea7761_19b7_08ad_81a5_d1f7a2300f9d_TB2580_00 b.Contribution Format Income Statement 11ea7761_19b7_08ae_81a5_9326ed055189_TB2580_00

To the nearest whole dollar,what should be the total property taxes at a sales volume of 37,200 units? (Assume that this sales volume is within the relevant range.)

Correct Answer
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Differential costs can:

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Dizzy employees a certified operator for each of its 35 rides.Each operator is paid $20 per hour.The cost of the certified operators would best be described as a:

Correct Answer
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Which of the following costs is classified as both a prime cost and a conversion cost?

Correct Answer
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A decrease in production will ordinarily result in a decrease in fixed production costs per unit.

Correct Answer
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False

Which of the following is an example of a period cost in a company that makes clothing?

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Fasheh Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows: -If 10,000 units are produced,the total amount of manufacturing overhead cost is closest to:

Correct Answer
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C

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If Lonnie were to sell 50,000 units,the total expected cost per unit would be:

Correct Answer
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Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year: -What is the total of the direct costs above?

Correct Answer
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Which of the following statements about product costs is true?

Correct Answer
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Ouelette 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: If 6,000 units are produced,the total amount of indirect manufacturing cost incurred is closest to:

Correct Answer
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Adens 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: -If 5,000 units are sold,the variable cost per unit sold is closest to:

Correct Answer
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Exam 1: Managerial Accounting and Cost Concepts

Correct AnswerverifiedShow Answer

Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost,where X is machine-hours.The August budget is based on 8,000 hours of planned machine time.Maintenance cost expected to be incurred during August is:

Correct AnswerverifiedShow Answer

Contribution margin is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Fanelli Corporation,a merchandising company,reported the following results for July: Cost of goods sold is a variable cost in this company. Required: a.Prepare a traditional format income statement for July. b.Prepare a contribution format income statement for July.

Correct Answerverifieda.Traditional Format Income Statement 11ea7761_19b7_08ad_81a5_d1f7a2300f9d_TB2580_00 b.Contribution Format Income Statement 11ea7761_19b7_08ae_81a5_9326ed055189_TB2580_00

To the nearest whole dollar,what should be the total property taxes at a sales volume of 37,200 units? (Assume that this sales volume is within the relevant range.)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Differential costs can:

Correct AnswerverifiedShow Answer

Dizzy employees a certified operator for each of its 35 rides.Each operator is paid $20 per hour.The cost of the certified operators would best be described as a:

Correct AnswerverifiedShow Answer

Which of the following costs is classified as both a prime cost and a conversion cost?

Correct AnswerverifiedShow Answer

A decrease in production will ordinarily result in a decrease in fixed production costs per unit.

Correct AnswerverifiedFalse

Which of the following is an example of a period cost in a company that makes clothing?

Correct AnswerverifiedShow Answer

Fasheh Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows: -If 10,000 units are produced,the total amount of manufacturing overhead cost is closest to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

If Lonnie were to sell 50,000 units,the total expected cost per unit would be:

Correct AnswerverifiedShow Answer

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year: -What is the total of the direct costs above?

Correct AnswerverifiedShow Answer

Which of the following statements about product costs is true?

Correct AnswerverifiedShow Answer

Ouelette 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: If 6,000 units are produced,the total amount of indirect manufacturing cost incurred is closest to:

Correct AnswerverifiedShow Answer

Adens 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: -If 5,000 units are sold,the variable cost per unit sold is closest to:

Correct AnswerverifiedShow Answer

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a.Traditional Format Income Statement 11ea7761_19b7_08ad_81a5_d1f7a2300f9d_TB2580_00 b.Contribution Format Income Statement 11ea7761_19b7_08ae_81a5_9326ed055189_TB2580_00

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False

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C

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