Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

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

Question 3

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 4

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)  $15.40 
A)  $13.00 
B)  $10.60 
C)  $12.10 
D)  $15.40

Question 5

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. 
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.

Question 6

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

Question 7

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)  $717,960 
A)  $725,680 
B)  $733,400 
C)  $749,172 
D)  $717,960

Question 8

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

Question 9

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)  $108.24 
A)  $107.93 
B)  $107.18 
C)  $108.67 
D)  $108.24

Question 10

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. 
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.

Question 11

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

Question 12

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)  $14.70 
A)  $16.75 
B)  $12.85 
C)  $11.90 
D)  $14.70

Question 13

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

Question 14

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)  $2.00 
A)  $2.20 
B)  $2.30 
C)  $2.50 
D)  $2.00

Question 15

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

Question 16

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

Question 17

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. 
A)  Direct materials. 
B)  Direct labor. 
C)  Variable overhead. 
D)  Fixed overhead.

Question 18

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)  $146,000 
A)  $180,500 
B)  $134,500 
C)  $157,500 
D)  $146,000

Question 19

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 20

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. 
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.

Exam 1: Managerial Accounting and Cost Concepts

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

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.

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:

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

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.)

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:

Which of the following statements about product costs is true?

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?

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:

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:

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

Differential costs can:

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:

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

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:

Contribution margin is:

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Master Budgeting

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Cost of Quality

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Job-Order Costing: a Microsoft Excel-Based Approach

Fifo Method

Service Department Allocations

Analyzing Mixed Costs

Time-Driven Activity-Based Costing: a Microsoft Excel-Based Approach

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Standard Cost Systems: a Financial Reporting Perspective Using Microsoft Excel

Transfer Pricing

Service Department Charges

Pricing Decisions

The Concept of Present Value

Income Taxes and the Present Value Method

the Direct Method of Determining the Net Cash Provided by Operating Activities

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