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1 thing 02 Student: 1. Direct material prices are typically variable costs. True False 2. Property taxes and also insurance premiums payment on a factory structure are examples of manufacturing overhead. True False 3. Production overhead combined with direct materials is known as conversion cost. True False 4. All costs incurred in a merchandising firm are considered to be period costs. True False 5. Depreciation is constantly considered a product cost for outside financial reporting purposes in a production firm. True False 6. In exterior financial reports, manufacturing facility utilities prices may be had in an asset account top top the balance sheet at the end of the period. True False 7. Advertising expenses are considered product expenses for exterior financial reports because they are incurred in order to promote details products. True False 8. Selling and administrative expenses are product expenses under usually accepted audit principles. True False

2 9. A variable price is a price whose cost per unit varies together the activity level rises and also falls. True False 10. When the level of task increases, complete variable expense will increase. True False 11. A decrease in production will ordinarily result in an increase in solved production expenses per unit. True False 12. Automation outcomes in a shift away from variable costs toward much more fixed costs. True False 13. In order because that a expense to be variable it have to vary through either units developed or systems sold. True False 14. The ide of the relevant range does not use to solved costs. True False 15. Indirect costs, such as production overhead, are constantly fixed costs. True False 16. Discretionary fixed prices arise from yearly decisions by monitoring to spend in details fixed expense areas. True False 17. Also if operations are interrupted or cut back, cursed fixed expenses remain greatly unchanged in the brief term because the expenses of restoring them later are most likely to be far greater than any type of short-run save that might be realized. True False 18. Committed fixed prices are fixed prices that room not controllable. True False

3 19. A mixed price is partly variable and partially fixed. True False 20. Traditional format income statements room prepared mostly for external reporting purposes. True False 21. In a contribution layout income statement, sales minus price of products sold equals the gun margin. True False 22. In a classic format earnings statement because that a merchandising company, the cost of goods sold reports the product prices attached come the goods sold during the period. True False 23. Although the contribution style income statement is advantageous for exterior reporting purposes, it has serious limitations when used for inner purposes due to the fact that it does no distinguish between fixed and also variable costs. True False 24. In a contribution layout income statement for a merchandising company, cost of products sold is a variable expense that gets consisted of in the "Variable expenses" part of the revenue statement. True False 25. The traditional format earnings statement is offered as an internal planning and decision-making tool. Its focus on cost actions aids cost-volume-profit analysis, management performance appraisals, and budgeting. True False 26. The complying with would typically be considered indirect prices of production a certain Boeing 747 come be yielded to Singapore Airlines: electricity to run manufacturing equipment, the manufacturing facility manager"s salary, and also the expense of the General electrical jet engines installed on the aircraft. True False

4 27. The following costs should be considered direct costs of providing shipment room services to a details mother and her baby: the costs of medicine administered in the operating room, the attending physician"s fees, and a part of the legal responsibility insurance brought by the hospital come cover the shipment room. True False 28. The following expenses should be considered by a regulation firm to it is in indirect prices of defending a particular client in court: rental on the law firm"s offices, the law firm"s receptionist"s wages, the expenses of heating the law firm"s offices, and also the depreciation top top the personal computer in the office of the lawyer who has actually been assigned the client. True False 29. In any type of decision make situation, sunk costs are irrelevant and should it is in ignored. True False 30. For a lamp production company, the price of the insurance on that vehicles that provide lamps to client is best described as a: A. Element cost. B. Production overhead cost. C. Duration cost. D. Differential (incremental) expense of a lamp. 31. The price of leasing production tools is share as: A. Option A B. Alternative B C. Option C D. Option D

5 32. The earnings of factory maintenance personnel would generally be taken into consideration to be: A. Alternative A B. Choice B C. Choice C D. Option D 33. Production overhead is composed of: A. All manufacturing costs. B. Indirect materials yet not indirect labor. C. All manufacturing costs, except direct materials and direct labor. D. Indirect labor however not indirect materials. 34. I m sorry of the following should no be included as part of production overhead at a company that provides office furniture? A. Sheet stole in a file cabinet do by the company. B. Manufacturing devices depreciation. C. Idle time for direct labor. D. Counting on a factory building. 35. Which of the following expenses would not be contained as part of production overhead? A. Insurance allowance on sales vehicles. B. Depreciation of manufacturing equipment. C. Lubricants for manufacturing equipment. D. Straight labor overtime premium. 36. Conversion cost consists of i m sorry of the following? A. Manufacturing overhead cost. B. Direct materials and direct labor cost. C. Direct labor cost. D. Direct labor and manufacturing overhead cost.

You are watching: Manufacturing overhead combined with direct materials is known as conversion cost.

6 37. The advertising expenses that Pepsi incurred to wait its commercials throughout the Super key can ideal be described as a: A. Change cost. B. Solved cost. C. Product cost. D. Element cost. 38. Every of the adhering to would it is in a duration cost except: A. The value of the company president"s secretary. B. The expense of a general accounting office. C. Depreciation the a maker used in manufacturing. D. Sales commissions. 39. Which of the following expenses is an instance of a duration rather 보다 a product cost? A. Depreciation on production equipment. B. Incomes of salespersons. C. Wages of production device operators. D. Insurance money on production equipment. 40. I m sorry of the following would be considered a product cost for external financial reporting purposes? A. Price of a warehouse provided to save finished goods. B. Cost of guided publicly tours v the company"s facilities. C. Price of travel crucial to sell the manufactured product. D. Price of sand spread out on the manufacturing facility floor to absorb oil from production machines. 41. I m sorry of the complying with would no be treated together a product price for external financial report purposes? A. Depreciation on a factory building. B. Salaries of factory workers. C. Indirect labor in the factory. D. Heralding expenses. 42. The value of the president of a manufacturing agency would be classified together which of the following? A. Product cost B. Period cost C. Production overhead D. Straight labor

7 43. Conversion costs do no include: A. Depreciation. B. Direct materials. C. Indirect labor. D. Indirect materials. 44. Last month, once 10,000 systems of a product to be manufactured, the expense per unit to be $60. In ~ this level of activity, variable expenses are 50% of total unit costs. If 10,500 units are manufactured next month and also cost habits patterns stay unchanged the: A. Complete variable price will stay unchanged. B. Fixed expenses will boost in total. C. Variable cost per unit will certainly increase. D. Full cost per unit will decrease. 45. Variable cost: A. Rises on a every unit basis together the number of units developed increases. B. Remains continuous on a every unit basis together the variety of units developed increases. C. Continues to be the very same in full as manufacturing increases. D. Reduce on a per unit basis as the variety of units created increases. 46. I m sorry of the adhering to statements regarding fixed expenses is incorrect? A. Expressing fixed costs on a every unit basis normally is the best strategy for decision making. B. Fixed expenses expressed on a per unit basis will certainly decrease with rises in activity. C. Total fixed prices are consistent within the pertinent range. D. Fixed prices expressed on a every unit basis will boost with decreases in activity. 47. The salary paid to the production manager in a factory is: A. A variable cost. B. Component of element cost. C. Component of conversion cost. D. Both a variable cost and also a prime cost. 48. In ~ the appropriate range, variable expense per unit will: A. Boost as the level of task increases. B. Stay constant. C. Decrease as the level of activity increases. D. Nobody of these.

8 49. The ax "relevant range" method the variety of activity over which: A. Relevant expenses are incurred. B. Prices may fluctuate. C. Production may vary. D. The assumptions about fixed and variable cost behavior are sensibly valid. 50. An instance of a committed fixed price is: A. A training regime for salespersons. B. Executive travel expenses. C. Property taxes ~ above the factory building. D. New product research and development. 51. In describing the cost formula equation Y = a + bx, i beg your pardon of the complying with statements is correct? A. "X" is the dependence variable. B. "a" is the fixed component. C. In the high-low method, "b" equals adjust in activity divided by readjust in costs. D. Together "X" boosts "Y" decreases. 52. Which among the following expenses should no be taken into consideration a direct price of serving a specific customer that orders a customized an individual computer by phone straight from the manufacturer? A. The price of the difficult disk drive installed in the computer. B. The price of shipping the computer to the customer. C. The price of leasing a machine on a monthly basis that automatically tests tough disk drives before they are installed in computers. D. The price of packaging the computer for shipment. 53. The ax differential cost refers to: A. A difference in expense which results from choosing one different instead that another. B. The benefit forgone by picking one different instead the another. C. A expense which does no involve any dollar outlay but which is appropriate to the decision-making process. D. A expense which continues to it is in incurred even though there is no activity. 54. I beg your pardon of the following prices is often essential in decision making, yet is omitted native conventional accountancy records? A. Resolved cost. B. Sunk cost. C. Chance cost. D. Indirect cost.

9 55. Once a decision is made amongst a number of alternatives, the advantage that is shed by choosing one different over another is the: A. Realized cost. B. Chance cost. C. Counter cost. D. Accrued cost. 56. The following prices were occurs in September: Conversion costs during the month totaled: A. $50,000 B. $59,000 C. $137,000 D. $67, The following expenses were incurred in September: Prime costs during the month totaled: A. $79,000 B. $120,000 C. $62,000 D. $40, In September direct labor to be 40% of counter cost. If the manufacturing overhead because that the month was $66,000 and also the straight materials price was $20,000, the direct labor price was: A. $13,333 B. $44,000 C. $99,000 D. $30,000

10 59. Aberge Company"s manufacturing overhead is 60% of its full conversion costs. If direct labor is $38,000 and if direct materials room $21,000, the manufacturing overhead is: A. $57,000 B. $88,500 C. $25,333 D. $31, during the month of September, direct labor cost totaled $11,000 and direct labor expense was 40% of element cost. If total manufacturing costs during September were $73,000, the manufacturing overhead was: A. $16,500 B. $27,500 C. $62,000 D. $45, A manufacturing agency prepays its insurance coverage for a three-year period. The premium because that the 3 years is $2,700 and also is payment at the beginning of the an initial year. Eighty percent of the premium uses to manufacturing operations and also 20% applies to selling and also administrative activities. What quantities should be considered product and duration costs respectively for the an initial year the coverage? A. Option A B. Choice B C. Option C D. Option D 62. Iadanza coporation, group is a wholesaler that sells a single product. Administration has detailed the following price data for 2 levels the monthly sales volume. The firm sells the product for $ every unit. The best estimate of the total contribution margin when 6,300 devices are marketed is: A. $752,220 B. $638,190 C. $100,170 D. $177,030

11 63. Gambarini corporation is a wholesaler the sells a single product. Management has listed the following cost data for two levels of monthly sales volume. The company sells the product for $ every unit. The finest estimate of the full monthly fixed price is: A. $541,800 B. $1,192,100 C. $1,099,200 D. $1,145, Bakker copy, group has provided the adhering to production and also average cost data for 2 levels that monthly production volume. The agency produces a solitary product. The best estimate that the complete variable manufacturing price per unit is: A. $89.70 B. $ C. $19.50 D. $ Carbaugh copy, group has provided the complying with production and average expense data for two levels that monthly manufacturing volume. The firm produces a single product. The best estimate that the complete cost come manufacture 3,300 units is the next to: A. $637,560 B. $612,975 C. $588,390 D. $619,680

12 66. Edeen coporation, group has provided the complying with production and total price data for 2 levels the monthly production volume. The firm produces a single product. The finest estimate of the complete variable manufacturing expense per unit is: A. $62.20 B. $96.50 C. $ D. $ Dabney corporation has listed the following production and total cost data for two levels of monthly production volume. The agency produces a solitary product. The finest estimate the the total monthly addressed manufacturing cost is: A. $778,400 B. $1,457,400 C. $1,505,900 D. $1,554, Haras coporation, group is a wholesaler that sells a single product. Administration has detailed the following expense data for two levels the monthly sales volume. The agency sells the product for $ every unit. The best estimate that the full variable expense per unit is: A. $ B. $79.60 C. $57.90 D. $130.70

13 69. Faraz copy, group has provided the following production and total price data for 2 levels that monthly production volume. The agency produces a single product. The best estimate that the full cost come manufacture 5,300 systems is closest to: A. $1,002,230 B. $1,021,780 C. $1,063,180 D. $941, Anderwald coporation, group has listed the complying with production and average price data for 2 levels of monthly manufacturing volume. The agency produces a single product. The ideal estimate the the full monthly solved manufacturing expense is: A. $360,800 B. $136,800 C. $196,800 D. $176, Anaconda Mining company shipped 9,000 lots of copper concentration for $450,000 in March and also 11,000 loads for $549,000 in April. Shipping expenses for 12,000 tons to be transport in may would be meant to be: A. $548,780 B. $549,020 C. $594,000 D. $598, typical maintenance prices are $1.50 per machine-hour at an activity level the 8,000 machine-hours and also $1.20 per machine-hour in ~ an task level that 13,000 machine-hours. Assuming the this task is in ~ the appropriate range, complete expected maintenance price for a budgeted activity level that 10,000 machine-hours would be closest to: A. $16,128 B. $15,000 C. $13,440 D. $11,433

14 73. The adhering to data pertains to activity and the expense of cleaning and also maintenance for two recent months: The finest estimate of the total month 1 variable expense for cleaning and maintenance is: A. $300 B. $500 C. $800 D. $ The adhering to data pertains to activity and costs for 2 months: Assuming the these task levels room within the appropriate range, the mixed expense for July was: A. $10,000 B. $35,000 C. $15,000 D. $40, at an activity level that 9,200 machine-hours in a month, Nooner Corporation"s full variable production engineering expense is $761,300 and also its complete fixed production engineering expense is $154,008. What would certainly be the total production engineering price per unit, both fixed and variable, at an task level the 9,300 machine-hours in a month? Assume the this level of activity is within the appropriate range. A. $98.42 B. $99.49 C. $99.31 D. $ Jumpst Corporation provides the cost formula Y = $3,600 + $0.30X because that the maintenance expense in department B, where X is machine-hours. The August spending plan is based on 20,000 hours of planned maker time. Maintenance price expected to it is in incurred during August is: A. $3,600 B. $6,000 C. $6,300 D. $9,600

15 77. Given the cost formula, Y = $9,000 + $2.50X, total cost for an task level of 3,000 devices would be: A. $9,750 B. $12,000 C. $16,500 D. $7, Blore coporation, group reports the at an activity level the 7,300 units, its full variable cost is $511,803 and its complete fixed cost is $76,650. What would be the total cost, both fixed and also variable, at an activity level that 7,500 units? Assume the this level of task is in ~ the relevant range. A. $604,575 B. $602,475 C. $596,514 D. $588, offered the expense formula Y = $15,000 + $5X, full cost at an activity level that 8,000 systems would be: A. $23,000 B. $15,000 C. $55,000 D. $40, at a volume of 10,000 units, agency P incurs $30,000 in factory overhead costs, consisting of $10,000 in solved costs. Assuming that this task is in ~ the appropriate range, if volume boosts to 12,000 units, firm P would expect to incur total factory overhead expenses of: A. $36,000 B. $34,000 C. $30,000 D. $32, at an task level that 4,400 systems in a month, Goldbach Corporation"s complete variable maintenance and also repair expense is $313,632 and its complete fixed maintenance and also repair cost is $93,104. What would be the complete maintenance and also repair cost, both fixed and variable, in ~ an task level that 4,600 devices in a month? Assume that this level of activity is in ~ the pertinent range. A. $420,992 B. $425,224 C. $415,980 D. $406,736

16 82. Supply prices at Lattea Corporation"s chain of gyms are listed below: monitoring believes the supply expense is a mixed cost that relies on client-visits. Utilizing the high-low technique to estimate the variable and also fixed materials of this cost, those approximates would be closest to: A. $2.44 every client-visit; $28,623 every month B. $1.33 every client-visit; $12,768 every month C. $0.79 every client-visit; $19,321 every month D. $0.75 per client-visit; $19,826 every month 83. Electrical expenses at among Vanartsdalen Corporation"s factories are provided below: administration believes that electrical cost is a mixed cost that relies on machine-hours. Using the high-low method to calculation the variable and also fixed components of this cost, these approximates would it is in closest to: A. $14.41 every machine-hour; $33,832 every month B. $0.11 per machine-hour; $33,957 per month C. $9.35 every machine-hour; $11,885 per month D. $11.30 every machine-hour; $7,229 per month 84. A soft drink bottler incurred the complying with plant energy costs: 1,800 devices bottled through utility prices of $5,750, and 1,500 units bottled v utility expenses of $5,200. What is the variable expense per unit bottled (Use the High-low method. Ring to the nearest cent.) A. $3.47. B. $3.19. C. $1.83. D. No one of the above is true.

17 85. The complying with data pertains to task and maintenance costs for two current years: making use of the high-low method, the expense formula for maintenance would be: A. $1.50 every unit B. $1.25 per unit C. $3,000 plus $1.50 every unit D. $6,000 plus $0.75 every unit 86. The following data pertains to activity and utility expenses for two current years: making use of the high-low method, the cost formula for utilities is: A. $1.50 every unit B. $1.20 per unit C. $3,000 plus $3.00 per unit D. $4,500 add to $0.75 every unit 87. Maintenance expenses at a Tierce Corporation factory are provided below: management believes the maintenance expense is a mixed price that relies on machine-hours. Making use of the high-low technique to calculation the variable and fixed materials of this cost, these estimates would be closest to: A. $14.54 every machine-hour; $52,671 per month B. $9.27 every machine-hour; $19,076 every month C. $0.11 every machine-hour; $52,591 every month D. $9.27 per machine-hour; $19,071 per month

18 88. Buckeye agency has listed the following data for maintenance cost: The ideal estimate of the price formula because that maintenance would certainly be: A. $21,625 every year plus $0.625 per machine hour B. $7,000 per year add to $0.625 per device hour C. $7,000 per year add to $1.60 per device hour D. $27,000 every year plus $1.60 per an equipment hour 89. Haar Inc. Is a merchandising company. Last month the company"s cost of goods sold to be $61,000. The company"s start merchandise inventory was $11,000 and also its ending merchandise inventory was $21,000. What to be the total amount that the company"s was purchases because that the month? A. $61,000 B. $51,000 C. $71,000 D. $93, Gabruk Inc. Is a merchandising company. Last month the company"s merchandise purchases totaled $88,000. The company"s start merchandise inventory to be $15,000 and also its finishing merchandise inventory was $13,000. What was the company"s price of products sold for the month? A. $88,000 B. $90,000 C. $86,000 D. $116,000 A partial listing of costs incurred during December at Gagnier Corporation appears below:

19 91. The full of the duration costs listed above for December is: A. $89,000 B. $310,000 C. $325,000 D. $399, The total of the manufacturing overhead costs provided above because that December is: A. $325,000 B. $635,000 C. $89,000 D. $40, The full of the product costs noted above because that December is: A. $310,000 B. $89,000 C. $635,000 D. $325,000 A partial listing of expenses incurred in ~ Backes Corporation throughout November appears below: 94. The full of the manufacturing overhead costs provided above for November is: A. $348,000 B. $31,000 C. $592,000 D. $77, The total of the product costs noted above because that November is: A. $77,000 B. $348,000 C. $592,000 D. $244,000

20 96. The total of the period costs detailed above for November is: A. $244,000 B. $321,000 C. $348,000 D. $77,000 Dickison Corporation reported the following data because that the month that December: 97. The conversion price for December was: A. $107,000 B. $142,000 C. $111,000 D. $178, The prime price for December was: A. $109,000 B. $111,000 C. $107,000 D. $66,000 monitoring of Mcentire Corporation has actually asked your aid as one intern in prepare some crucial reports because that April. Direct materials cost was $64,000, straight labor expense was $47,000, and manufacturing overhead was $75,000. Selling cost was $15,000 and administrative price was $44, The conversion cost for April was: A. $186,000 B. $100,000 C. $128,000 D. $122,000

21 100. The prime price for April was: A. $59,000 B. $122,000 C. $100,000 D. $111,000 Callander coporation, group is a wholesaler that sells a single product. Administration has listed the following price data for 2 levels that monthly sales volume. The agency sells the product for $ per unit The finest estimate that the full monthly fixed cost is: A. $846,000 B. $886,050 C. $365,400 D. $926, The finest estimate the the total variable price per unit is: A. $ B. $80.10 C. $69.30 D. $ The best estimate of the full contribution margin as soon as 6,300 devices are offered is: A. $450,450 B. $518,490 C. $121,590 D. $66,780 Babuca corporation has noted the adhering to production and also total price data for 2 levels that monthly manufacturing volume. The company produces a solitary product.

22 104. The best estimate of the complete monthly addressed manufacturing expense is: A. $1,424,400 B. $1,506,400 C. $932,400 D. $1,465, The ideal estimate that the complete variable manufacturing cost per unit is: A. $82.00 B. $70.20 C. $56.70 D. $ The ideal estimate of the total cost come manufacture 6,300 systems is closest to: A. $1,425,690 B. $1,355,760 C. $1,495,620 D. $1,449,000 The following production and average cost data for 2 levels that monthly manufacturing volume have actually been offered by a agency that produces a single product: 107. The ideal estimate of the complete monthly addressed manufacturing expense is: A. $25,600 B. $114,400 C. $47,700 D. $69, The finest estimate the the complete variable manufacturing price per unit is: A. $22.10 B. $66.70 C. $88.80 D. $15.70

23 109. The finest estimate that the total cost to manufacture 1,200 systems is the next to: A. $132,160 B. $121,920 C. $129,600 D. $137,280 Erkkila Inc. Reports that at an task level of 7,900 machine-hours in a month, its full variable inspection expense is $210,061 and also its complete fixed inspection price is $191, What would be the median fixed inspection expense per unit in ~ an activity level the 8,100 machine-hours in a month? Assume that this level of task is within the relevant range. A. $50.89 B. $24.30 C. $23.70 D. $ What would certainly be the complete variable inspection expense at an task level that 8,100 machine-hours in a month? Assume that this level of task is within the pertinent range. A. $210,061 B. $196,830 C. $215,379 D. $402,031 at an activity level the 5,300 machine-hours in a month, Clyburn Corporation"s total variable maintenance cost is $114,268 and its full fixed maintenance expense is $154, What would certainly be the complete variable maintenance cost at an activity level the 5,600 machine-hours in a month? Assume that this level of task is in ~ the pertinent range. A. $163,072 B. $268,604 C. $114,268 D. $120,736

24 113. What would certainly be the typical fixed maintenance expense per unit in ~ an activity level of 5,600 machine-hours in a month? Assume the this level of activity is in ~ the appropriate range. A. $50.68 B. $27.56 C. $35.79 D. $29.12 Slappy coporation, group leases its this firm headquarters building. This lease price is addressed with respect come the company"s sales volume. In a current month in i m sorry the sales volume to be 20,000 units, the lease cost was $482, come the nearest whole dollar, what should be the total lease cost at a sales volume that 16,900 devices in a month? (Assume the this sales volume is in ~ the pertinent range.) A. $407,290 B. $482,000 C. $570,414 D. $444, come the nearest entirety cent, what have to be the average lease price per unit at a sales volume the 19,200 units in a month? (Assume that this sales volume is within the pertinent range.) A. $28.52 B. $24.60 C. $25.10 D. $24.10 at a sales volume the 35,000 units, Thoma Corporation"s sales rose (a price that is variable through respect to sales volume) full $448, to the nearest entirety dollar, what should be the total sales rose at a sales volume that 33,200 units? (Assume that this sales volume is in ~ the appropriate range.) A. $424,960 B. $448,000 C. $436,480 D. $472,289

25 117. Come the nearest totality cent, what have to be the mean sales commission every unit at a sales volume of 36,800 units? (Assume that this sales volume is in ~ the relevant range.) A. $13.49 B. $12.17 C. $12.80 D. $12.49 at a sales volume of 27,000 units, danielle Corporation"s residential or commercial property taxes (a price that is fixed with respect to sales volume) complete $207, come the nearest whole dollar, what should be the complete property taxes in ~ a sales volume that 30,900 units? (Assume that this sales volume is in ~ the pertinent range.) A. $207,900 B. $181,660 C. $222,915 D. $237, to the nearest entirety cent, what must be the average property taxation per unit at a sales volume of 27,600 units? (Assume that this sales volume is in ~ the pertinent range.) A. $6.73 B. $7.70 C. $7.62 D. $7.53 Chaffee corporation staffs a helpline to answer inquiries from customers. The expenses of operation the helpline space variable with respect to the variety of calls in a month. In ~ a volume that 33,000 phone call in a month, the costs of operating the helpline complete $742, come the nearest totality dollar, what have to be the total cost of operating the helpline costs at a volume that 34,800 call in a month? (Assume the this contact volume is within the relevant range.) A. $742,500 B. $783,000 C. $704,095 D. $762,750

26 121. To the nearest totality cent, what should be the average cost of operating the helpline per contact at a volume of 36,100 calls in a month? (Assume the this speak to volume is within the appropriate range.) A. $21.54 B. $20.57 C. $21.34 D. $22.50 Emilio corporation reports that at an task level the 3,400 units, its full variable expense is $59,058 and also its total fixed price is $101, What would certainly be the total variable expense at an activity level the 3,500 units? Assume that this level of task is in ~ the relevant range. A. $59,058 B. $160,208 C. $60,795 D. $104, What would be the mean fixed expense per unit at an activity level the 3,500 units? Assume the this level of activity is in ~ the appropriate range. A. $29.75 B. $47.12 C. $35.26 D. $28.90 Inspection expenses at among Krivanek Corporation"s factories are provided below: monitoring believes that inspection expense is a mixed cost that depends on systems produced.

27 124. Utilizing the high-low method, the estimate of the change component that inspection price per unit developed is closestly to: A. $3.15 B. $0.32 C. $3.40 D. $ utilizing the high-low method, the estimate of the fixed component the inspection cost per month is closestly to: A. $8,743 B. $8,887 C. $8,683 D. $6,869 Glatt Inc., one escrow agent, has detailed the adhering to data worrying its office expenses: administration believes the office price is a mixed price that depends on the variety of escrows completed. Note: genuine estate purchases commonly involve the services of an escrow agent that holds funds and also prepares records to finish the transaction utilizing the high-low method, the calculation of the variable component that office price per escrow perfect is the next to: A. $ B. $59.12 C. $17.11 D. $ using the high-low method, the estimate of the fixed component the office expense per month is closestly to: A. $6,692 B. $8,064 C. $7,376 D. $7,720

28 Electrical expenses at among Reifel Corporation"s factories are noted below: monitoring believes the electrical cost is a mixed cost that counts on machine-hours utilizing the high-low method, the estimate of the variable component that electrical expense per machine-hour is closestly to: A. $0.12 B. $20.38 C. $7.98 D. $ utilizing the high-low method, the calculation of the addressed component that electrical cost per month is closestly to: A. $5,594 B. $3,514 C. $5,875 D. $5,840 The complying with data have been noted by a retailer that sells a single product What is the finest estimate the the company"s change selling and also administrative expense per unit? A. $4.17 per unit B. $0.24 per unit C. $0.90 per unit D. $0.71 every unit

29 131. What is the best estimate the the company"s complete fixed selling and administrative expense per year? A. $0 B. $80,000 C. $44,000 D. 174, What is the finest estimate of the company"s contribution margin for this year? A. $252,000 B. $300,000 C. $158,000 D. $120,000 Nikkel Corporation, a merchandising company, reported the following results because that July: 133. The gun margin for July is: A. $358,500 B. $209,000 C. $233,700 D. $164, The donation margin for July is: A. $333,800 B. $209,000 C. $233,700 D. $164,700

30 Holzhauer Corporation, a merchandising company, report the complying with results for March: cost of items sold is a variable cost in this company The pistol margin because that March is: A. $922,600 B. $1,120,000 C. $2,202,600 D. $1,360, The donation margin for March is: A. $922,600 B. $1,120,000 C. $1,962,600 D. $1,360,000 Fiene Sales, Inc., a merchandising company, report sales of 2,200 devices in June in ~ a offering price that $600 every unit. Cost of goods sold, which is a change cost, was $364 every unit. Variable selling costs were $23 every unit and variable governmental expenses were $33 every unit. The complete fixed selling costs were $30,500 and also the total administrative expenses to be $55, The contribution margin because that June was: A. $1,111,000 B. $396,000 C. $310,200 D. $519, The gun margin because that June was: A. $310,200 B. $1,234,200 C. $396,000 D. $519,200

31 Getchman Marketing, Inc., a merchandising company, report sales that $592,500 and cost of goods sold the $305,000 because that April. The company"s total variable selling price was $37,500; its full fixed selling expense was $16,000; its full variable bureaucratic expense was $35,000; and also its full fixed administrative expense to be $38,900. The expense of goods sold in this agency is a variable price The donation margin for April is: A. $465,100 B. $287,500 C. $160,100 D. $215, The gun margin for April is: A. $287,500 B. $215,000 C. $537,600 D. $160,100 Salvadore Inc., a neighborhood retailer, has noted the following data for the month of September: 141. The expense of items sold for September was: A. $132,000 B. $134,000 C. $133,000 D. $200, The net operating income for September was: A. $60,000 B. $128,000 C. $127,000 D. $59,000

32 The following price data pertain to the operations of Swestka room Stores, Inc., for the month the July. The Northridge store is just one of plenty of stores owned and operated through the company. The Cosmetics department is one of countless departments in ~ the Northridge Store. The central warehouse serves all of the company"s stores What is the total amount the the costs listed above that room direct prices of the Cosmetics Department? A. $74,000 B. $36,000 C. $31,000 D. $40, What is the complete amount the the costs noted above that space NOT direct expenses of the Northridge Store? A. $40,000 B. $34,000 C. $141,000 D. $78,000 The following cost data pertain to the to work of Mancia department Stores, Inc., for the month that February. The Brentwood store is just one of countless stores owned and operated by the company. The shoe Department is one of countless departments at the Brentwood Store. The central warehouse serves every one of the company"s stores.

33 145. What is the total amount of the costs provided above that space direct expenses of the shoes Department? A. $80,000 B. $88,000 C. $130,000 D. $92, What is the complete amount that the costs noted above that space NOT direct expenses of the Brentwood Store? A. $152,000 B. $92,000 C. $79,000 D. $38,000 monitoring of Modugno corporation is considering even if it is to acquisition a brand-new model 370 machine costing $441,000 or a brand-new model 240 device costing $387,000 to replace a maker that was purchased 7 years back for $429,000. The old device was used to make product M25A until it damaged down critical week. Unfortunately, the old maker cannot it is in repaired. Monitoring has decided to buy the new model 240 machine. It has less capacity than the brand-new model 370 machine, but its capacity is adequate to proceed making product M25A. Management also considered, however rejected, the different of just dropping product M25A. If the were done, rather of investing $387,000 in the new machine, the money can be invested in a project that would return a full of $430, In making the decision to buy the model 240 device rather 보다 the model 370 machine, the sunk cost was: A. $430,000 B. $429,000 C. $387,000 D. $441, In make the decision come buy the model 240 maker rather than the model 370 machine, the differential cost was: A. $12,000 B. $1,000 C. $54,000 D. $42,000

34 149. In making the decision to invest in the version 240 machine, the opportunity cost was: A. $430,000 B. $441,000 C. $387,000 D. $429,000 Temblador Corporation to buy a machine 7 years earlier for $319,000 when it launched product E26T. Unfortunately, this maker has broken down and cannot it is in repaired. The device could be replaced by a brand-new model 330 machine costing $323,000 or by a brand-new model 230 an equipment costing $285,000. Administration has made decision to purchase the version 230 machine. It has actually less capacity than the version 330 machine, but its volume is adequate to continue making product E26T. Management likewise considered, yet rejected, the alternate of dropping product E26T and not replacing the old machine. If that were done, the $285,000 invest in the new machine could instead have been invest in a job that would have actually returned a complete of $386, In making the decision come buy the version 230 device rather 보다 the model 330 machine, the differential price was: A. $34,000 B. $38,000 C. $4,000 D. $67, In make the decision come buy the version 230 maker rather than the design 330 machine, the sunk expense was: A. $319,000 B. $386,000 C. $285,000 D. $323, In make the decision to invest in the version 230 machine, the opportunity price was: A. $386,000 B. $319,000 C. $285,000 D. $323,000

35 153. Bill Pope has emerged a new machine that is so exciting he is considering quitting his job in order come produce and also market the on a massive basis. Bill will certainly rent a garage for $300 per month for production purposes. Utilities will price $40 per month. Bill has currently taken one industrial architecture course at the local neighborhood college to aid prepare for this venture. The course price $300. Bill will rent production equipment at a monthly cost of $800. He approximates the material cost per unit will be $5, and the labor cost will it is in $3. He will hire workers and also spend his time fostering the product. To do this he will certainly quit his project which payment $3,000 per month. Advertising and promotion will expense $900 every month. Required: complete the chart listed below by put an "X" under every heading the helps to recognize the price involved. There deserve to be "Xs" inserted under an ext than one heading because that a solitary cost, e.g., a cost might it is in a sunk cost, one overhead cost and a product cost; there would certainly be an "X" put under every of these headings the contrary the cost. * in between the options of going into business to make the maker or no going into organization to make the device.

36 154. Laco company acquired that factory building about 20 years ago. Because that a number of years the agency has rented out a small, unused component of the building. The renter"s lease will certainly expire soon. Fairly than renewing the lease, Laco company is considering using the room itself to manufacture a new product. Under this option, the unused an are will proceed to it is in depreciated ~ above a straight-line basis, as in previous years. Straight materials and also direct labor expense for the new product would certainly be $50 per unit. In stimulate to have actually a location to store finished devices of the brand-new product, the company would have to rent a small warehouse nearby. The rental price would be $2,000 every month. That would expense the company an additional $4,000 each month to advertise the new product. A new production supervisor would be rental to oversee manufacturing of the brand-new product that would be payment $3,000 every month. The firm would salary a sales the supervisory board of $10 because that each unit that product that is sold. Required: complete the chart below by place an "X" under each tower heading the helps to determine the costs provided to the left. There have the right to be "X"s" placed under an ext than one heading because that a single cost. For example, a cost might it is in a product cost, an opportunity cost, and a sunk cost; there would be one "X" put under each of these headings on the answer sheet opposite the cost. *Between the choices of (1) renting the an are out again or (2) making use of the an are to produce the new product.

37 155. Lettman copy, group has provided the following partial listing of expenses incurred throughout November: Required: a. What is the complete amount the product cost detailed above? present your work. B. What is the complete amount of period cost noted above? display your work-related A partial listing of expenses incurred in ~ Starr Corporation throughout June shows up below: Required: a. What is the complete amount that product cost listed above? show your work. B. What is the full amount of duration cost provided above? display your work.

38 157. The following information summarizes the company"s price structure: Required: estimate the following prices at the 40,000 unit level of activity: a. Complete variable cost. B. Full fixed cost. C. Variable price per unit. D. Fixed price per unit Corio coporation, group reports that at an activity level the 3,800 units, its complete variable expense is $221,464 and its full fixed price is $94,848. Required: for the task level the 3,900 units, compute: (a) the total variable cost; (b) the complete fixed cost; (c) the full cost; (d) the typical variable cost per unit; (e) the average fixed price per unit; and (f) the average total cost per unit. Assume that this task level is in ~ the relevant range.

39 159. In ~ an activity level that 5,900 units, Haas Corporation"s full variable expense is $347,982 and its complete fixed price is $284,321. Required: because that the activity level of 6,100 units, compute: (a) the total variable cost; (b) the complete fixed cost; (c) the total cost; (d) the typical variable price per unit; (e) the mean fixed expense per unit; and (f) the average complete cost every unit. Assume the this activity level is in ~ the relevant range A number of costs and also measures of task are noted below. Required: because that each article above, indicate whether the cost is mostly fixed or variable v respect to the feasible measure that activity noted next to it.

40 161. A number of costs and also measures of task are provided below. Required: because that each items above, show whether the cost is greatly fixed or variable through respect to the possible measure of activity noted next to it Slonaker Inc. Has listed the following data concerning its maintenance costs: administration believes that maintenance cost is a mixed cost that depends on machine-hours. Required: estimate the variable price per machine-hour and the fixed expense per month utilizing the high-low method. Display your work!

41 163. Utility costs at one of Helker Corporation"s factory are provided below: monitoring believes the utility cost is a mixed expense that depends on machine-hours. Required: calculation the variable price per machine-hour and also the fixed price per month making use of the high-low method. Display your work! ring off every calculations to the nearest entirety cent.

42 164. The administration of Harrigill copy, group would favor to have a far better understanding the the actions of its inspection costs. The agency has provided the adhering to data: administration believes the inspection cost is a mixed price that relies on direct labor-hours. Required: estimate the variable expense per direct labor-hour and also the fixed expense per month making use of the high-low method. Display your work! round off every calculations to the nearest whole cent In October, Patnode Inc., a merchandising company, had actually sales of $294,000, selling expenses of $27,000, and also administrative expenses of $35,000. The cost of was purchased during the month to be $211,000. The beginning balance in the merchandise inventory account was $38,000 and the ending balance was $34,000. Required: Prepare a classic format earnings statement because that October.

43 166. Whitman Corporation, a merchandising company, reported sales that 7,400 systems for may at a marketing price the $677 every unit. The price of goods sold (all variable) to be $441 per unit and the change selling cost was $54 per unit. The total fixed selling expense was $155,600. The variable administrative expense was $24 every unit and also the full fixed administrative expense was $370,400. Required: a. Prepare a contribution style income statement because that May. B. Prepare a classic format income statement for may Donmoyer Sales Corporation, a merchandising company, reported complete sales of $2,230,200 for May. The price of items sold (all variable) was $1,518,300, the complete variable selling cost was $214,200, the complete fixed selling cost was $86,700, the full variable governmental expense was $119,700, and the complete fixed governmental expense to be $138,400. Required: a. Prepare a contribution layout income statement because that May. B. Prepare a classic format revenue statement because that May.

44 168. Pittman Corporation, a merchandising company, reported the following results because that September: Required: a. Prepare a classic format revenue statement because that September. B. Prepare a contribution format income statement because that September honey Corporation, a merchandising company, reported the adhering to results for January: expense of products sold is a variable cost in this company. Required: a. Prepare a classic format earnings statement for January. B. Prepare a contribution style income statement for January.

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45 170. A variety of costs are noted below. Required: for each article above, indicate whether the cost is straight or indirect with respect to the expense object provided next come it.

46 thing 02 an essential 1. Direct material expenses are generally variable costs. TRUE AACSB: Reflective reasoning Blooms: understanding Garrison - thing 02 #1 finding out Objective: Identify and give examples of every of the three straightforward manufacturing cost categories learning Objective: recognize cost habits patterns consisting of variable costs; addressed costs; and also mixed prices 2. Residential or commercial property taxes and also insurance premiums paid on a factory building are examples of manufacturing overhead. TRUE AACSB: Reflective thinking Blooms: understanding Garrison - thing 02 #2 finding out Objective: Identify and also give instances of every of the three basic manufacturing expense categories 3. Manufacturing overhead linked with straight materials is well-known as counter cost. FALSE AACSB: Reflective reasoning Blooms: expertise Garrison - chapter 02 #3 learning Objective: Identify and also give instances of every of the three straightforward manufacturing price categories 4. All costs incurred in a merchandising for sure are considered to be period costs. FALSE AACSB: Reflective reasoning Blooms: understanding Garrison - chapter 02 #4 discovering Objective: Distinguish between product expenses and duration costs and give examples of each

47 5. Depreciation is always considered a product cost for exterior financial reporting objectives in a production firm. FALSE AACSB: Reflective reasoning Blooms: understanding Garrison - chapter 02 #5 discovering Objective: Distinguish in between product expenses and period costs and give examples of every Level: medium 6. In outside financial reports, manufacturing facility utilities prices may be consisted of in an legacy account top top the balance paper at the finish of the period. TRUE AACSB: Reflective reasoning Blooms: comprehension Garrison - thing 02 #6 discovering Objective: Distinguish in between product costs and period costs and give instances of each Level: hard 7. Advertising costs are considered product prices for outside financial reports due to the fact that they are incurred in order to promote specific products. FALSE AACSB: Reflective thinking Blooms: comprehension Garrison - thing 02 #7 finding out Objective: Distinguish between product costs and period costs and also give instances of each Level: tool 8. Selling and also administrative prices are product costs under generally accepted bookkeeping principles. FALSE AACSB: Reflective reasoning Blooms: expertise Garrison - thing 02 #8 finding out Objective: Distinguish in between product expenses and period costs and give instances of each

48 9. A variable cost is a expense whose price per unit varies as the activity level rises and also falls. FALSE AACSB: Reflective reasoning Blooms: understanding Garrison - thing 02 #9 discovering Objective: recognize cost behavior patterns consisting of variable costs; resolved costs; and mixed expenses 10. As soon as the level of activity increases, full variable cost will increase. TRUE AACSB: Reflective reasoning Blooms: understanding Garrison - thing 02 #10 discovering Objective: know cost actions patterns including variable costs; fixed costs; and also mixed prices 11. A diminish in manufacturing will ordinarily an outcome in boost in addressed production prices per unit. TRUE Blooms: expertise Garrison - thing 02 #11 discovering Objective: know cost habits patterns consisting of variable costs; fixed costs; and also mixed costs 12. Automation results in a change away from variable costs toward an ext fixed costs. TRUE AACSB: Reflective thinking Blooms: knowledge Garrison - chapter 02 #12 discovering Objective: understand cost habits patterns consisting of variable costs; resolved costs; and mixed costs

49 13. In order for a price to be change it should vary v either units produced or units sold. FALSE AACSB: Reflective reasoning Blooms: comprehension Garrison - chapter 02 #13 finding out Objective: understand cost actions patterns consisting of variable costs; solved costs; and also mixed prices Level: medium 14. The principle of the relevant variety does not apply to fixed costs. FALSE AACSB: Reflective thinking Blooms: expertise Garrison - chapter 02 #14 learning Objective: understand cost actions patterns consisting of variable costs; solved costs; and also mixed expenses 15. Indirect costs, such as production overhead, are always fixed costs. FALSE AACSB: Reflective thinking Blooms: understanding Garrison - chapter 02 #15 learning Objective: understand cost actions patterns consisting of variable costs; resolved costs; and mixed expenses Level: medium 16. Discretionary fixed costs arise from annual decisions by monitoring to spend in specific fixed cost areas. TRUE AACSB: Reflective thinking Blooms: understanding Garrison - thing 02 #16 finding out Objective: know cost habits patterns including variable costs; solved costs; and also mixed costs

50 17. Even if operations space interrupted or reduced back, cursed fixed costs remain mostly unchanged in the quick term because the expenses of restoring them later are likely to be much greater than any short-run to save that might be realized. TRUE AACSB: Reflective thinking Blooms: knowledge Garrison - chapter 02 #17 finding out Objective: understand cost actions patterns including variable costs; resolved costs; and also mixed expenses 18. Cursed fixed costs are fixed expenses that are not controllable. FALSE AACSB: Reflective reasoning Blooms: comprehension Garrison - chapter 02 #18 discovering Objective: know cost habits patterns including variable costs; solved costs; and mixed expenses Level: tough 19. A mixed expense is partly variable and partially fixed. TRUE AACSB: Reflective reasoning Blooms: knowledge Garrison - chapter 02 #19 learning Objective: recognize cost habits patterns including variable costs; resolved costs; and mixed costs 20. Timeless format income statements space prepared mainly for exterior reporting purposes. TRUE AACSB: Reflective thinking Blooms: expertise Garrison - chapter 02 #20 discovering Objective: Prepare income statements for a merchandising company using the traditional and contribution formats