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Exam 1: Managerial Accounting and Cost Concepts

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Question 61

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Krimton Corporation's manufacturing costs last year consisted of $150, 000 of direct materials, $200, 000 of direct labor, $40, 000 of variable manufacturing overhead, and $25, 000 of fixed manufacturing overhead. Prime cost was:

A) $150, 000
B) $190, 000
C) $350, 000
D) $415, 000

E) B) and D)
F) None of the above

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Question 62

Multiple Choice

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The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total variable manufacturing cost per unit is:

A) $39.10
B) $27.70
C) $11.40
D) $13.20

E) None of the above
F) All of the above

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Question 63

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Frank Company operates a cafeteria for its employees.The number of meals served each week over the last seven weeks, along with the total costs of operating the cafeteria are given below: Assume that the relevant range includes all of the activity levels mentioned in this problem. Assume that the cafeteria expects to serve 1, 850 meals during Week 8.Using the high-low method, the expected total cost of the cafeteria would be:

Ence Sales, Inc. , a merchandising company, reported sales of 6, 400 units in April at a selling price of $684 per unit.Cost of goods sold, which is a variable cost, was $455 per unit.Variable selling expenses were $30 per unit and variable administrative expenses were $40 per unit.The total fixed selling expenses were $156, 800 and the total administrative expenses were $260, 400. The contribution margin for April was:

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

Eddy Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total variable manufacturing cost per unit is:

Calip Corporation, a merchandising company, reported the following results for October: The contribution margin for October is:

Data for Cost A and Cost B appear below: Which of the above best describes the behavior of Costs A and B?

Searls Corporation, a merchandising company, reported the following results for July: Cost of goods sold is a variable cost in this company. The gross margin for July is:

Anderson Corporation has provided the following production and average cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total monthly fixed manufacturing cost is:

Management of Lewallen Corporation has asked your help as an intern in preparing some key reports for September.Direct materials cost was $57, 000, direct labor cost was $43, 000, and manufacturing overhead was $71, 000.Selling expense was $15, 000 and administrative expense was $32, 000. The prime cost for September was:

Fresh Wreath Corporation manufactures wreaths according to customer specifications and ships them to customers using United Parcel Service (UPS) .Which two terms below describe the cost of shipping these wreaths?

At an activity level of 8, 800 units, Pember Corporation's total variable cost is $146, 520 and its total fixed cost is $219, 296. Required: For the activity level of 8, 900 units, compute: (a)the total variable cost; (b)the total fixed cost; (c)the total cost; (d)the average variable cost per unit; (e)the average fixed cost per unit;and (f)the average total cost per unit.Assume that this activity level is within the relevant range.

Selling costs can be either direct or indirect costs.

A direct cost is a cost that cannot be easily traced to the particular cost object under consideration.

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total cost to manufacture 1, 200 units is closest to:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: Which of the following classifications best describes the behavior of shipping expense?

Depreciation on office equipment would be included in product costs.

Data concerning Nelson Company's activity for the first six months of the year appear below: Using the high-low method of analysis, the estimated monthly fixed component of the electrical cost is:

Nieman Inc. , a local retailer, has provided the following data for the month of March: The cost of goods sold for March was: