Exam 1: Managerial Accounting and Cost Concepts

Dake 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 3,000 units are produced,the total amount of direct manufacturing cost incurred is closest to:

Rhome 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 produced,the total amount of fixed manufacturing cost incurred is closest to:

Pedregon Corporation has provided the following information: -If 4,000 units are sold,the variable cost per unit sold is closest to:

Varela 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: -For financial reporting purposes,the total amount of period costs incurred to sell 4,000 units is closest to:

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

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:

Gabel Inc.is a merchandising company.Last month the company's merchandise purchases totaled $63,000.The company's beginning merchandise inventory was $13,000 and its ending merchandise inventory was $15,000.What was the company's cost of goods sold for the month?

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

The cost of electricity for running production equipment is classified as:

An income statement for Sam's Bookstore for the first quarter of the year is presented below: On average, a book sells for $50. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. -If 20,000 books are sold during the second quarter and this activity is within the relevant range,the company's expected contribution margin would be:

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 220 machine rather than the model 370 machine,the differential cost was:

Skolnick Corporation has provided the following information: Required: a.If 8,000 units are produced,what is the total amount of direct manufacturing cost incurred? b.If 8,000 units are produced,what is the total amount of indirect manufacturing costs incurred?

Mullennex 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 produced,the average fixed manufacturing cost per unit produced is closest to:

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. -The salary that Mark earns at his present employ is:

For an automobile manufacturer,the cost of a driver's side air bag purchased from a supplier and installed in every automobile would best be described as a:

Dobosh Corporation has provided the following information: Required: a.For financial reporting purposes,what is the total amount of product costs incurred to make 9,000 units? b.For financial reporting purposes,what is the total amount of period costs incurred to sell 9,000 units? c.If 10,000 units are sold,what is the variable cost per unit sold? d.If 10,000 units are sold,what is the total amount of variable costs related to the units sold? e.If 10,000 units are produced,what is the total amount of manufacturing overhead cost incurred? f.If the selling price is $21.60 per unit,what is the contribution margin per unit sold? g.If 8,000 units are produced,what is the total amount of direct manufacturing cost incurred? h.If 8,000 units are produced,what is the total amount of indirect manufacturing costs incurred? i.What incremental manufacturing cost will the company incur if it increases production from 9,000 to 9,001 units?

As activity decreases within the relevant range,fixed costs remain constant on a per unit basis.

Committed fixed costs remain largely unchanged in the short run.

Bauman Sales Corporation,a merchandising company,reported total sales of $4,069,800 for November.The cost of goods sold (all variable)was $2,351,100,the total variable selling expense was $204,000,the total fixed selling expense was $117,700,the total variable administrative expense was $102,000,and the total fixed administrative expense was $267,000. Required: a.Prepare a contribution format income statement for November. b.Prepare a traditional format income statement for November.

Schwiesow Corporation has provided the following information: -The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to: