Exam 1: Managerial Accounting and Cost Concepts

Bowering Corporation has provided the following information: For financial reporting purposes, the total amount of product costs incurred to make 9,000 units is closest to:

The following cost data pertain to the operations of Ladwig Department Stores, Inc., for the month of December. The Brentwood Store is just one of many stores owned and operated by the company. The Shoe Department is one of many departments at the Brentwood Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Shoe Department?

Depreciation on equipment a company uses in its selling and administrative activities would be classified as a period cost.

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

Factory overhead is typically a(n):

A cost that differs from one month to another is known as a sunk cost.

Glew Corporation has provided the following information: For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is closest to:

Dominik Corporation purchased a machine 5 years ago for $527,000 when it launched product M08Y. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 310 machine costing $545,000 or by a new model 240 machine costing $450,000. Management has decided to buy the model 240 machine. It has less capacity than the model 310 machine, but its capacity is sufficient to continue making product M08Y. Management also considered, but rejected, the alternative of dropping product M08Y and not replacing the old machine. If that were done, the $450,000 invested in the new machine could instead have been invested in a project that would have returned a total of $532,000. In making the decision to buy the model 240 machine rather than the model 310 machine, the sunk cost was:

The relative proportion of variable, fixed, and mixed costs in a company is known as the company's:

A partial listing of costs incurred during March at Febbo Corporation appears below: The total of the period 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.

Salomon Marketing, Inc., a merchandising company, reported sales of $1,555,500 and cost of goods sold of $1,025,100 for December. The company's total variable selling expense was $96,900; its total fixed selling expense was $34,300; its total variable administrative expense was $71,400; and its total fixed administrative expense was $100,100. The cost of goods sold in this company is a variable cost. The contribution margin for December is:

Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory?

Within the relevant range, variable costs can be expected to:

Lambeth Corporation has provided the following information: If 3,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Karpowicz 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: Required: a. If the selling price is $21.40 per unit, what is the contribution margin per unit sold? b. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred? c. If 8,000 units are produced, what is the total amount of indirect manufacturing cost incurred? d. What incremental manufacturing cost will the company incur if it increases production from 9,000 to 9,001 units?

Property taxes on a company's factory building would be classified as a(n):

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

Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device. 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:

The fixed portion of the cost of electricity for a manufacturing facility is classified as a: