Question 1

The contribution margin for October is:

Accepted Answer

A) $1,424,500 
B) $3,191,400 
C) $1,901,900 
D) $996,900 
A) $1,424,500 
B) $3,191,400 
C) $1,901,900 
D) $996,900

Question 2

Wippert Corporation, a merchandising company, reported the following results for December:   Required:
a.Prepare a traditional format income statement for December.
b.Prepare a contribution format income statement for December.

Accepted Answer

a.Traditional Format

Question 3

Selling and administrative expenses are period costs under generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 4

The contribution format income statement is used as an internal planning and decision-making tool.Its emphasis on cost behavior aids cost-volume-profit analysis, management performance appraisals, and budgeting.

Accepted Answer

A) True 
 B)False

Question 5

Given the cost formula, Y = $16,000 + $3.40X, total cost for an activity level of 4,000 units would be:

Accepted Answer

A) $13,600 
B) $3,600 
C) $29,600 
D) $16,000 
A) $13,600 
B) $3,600 
C) $29,600 
D) $16,000

Question 6

Direct labor cost is classified as:

Accepted Answer

The answer of Direct labor cost is classified as: ...

Question 7

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Accepted Answer

A) $16,300 
B) $25,600 
C) $19,400 
D) $13,200 
A) $16,300 
B) $25,600 
C) $19,400 
D) $13,200

Question 8

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 9

The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n):

Accepted Answer

A) period cost. 
B) direct material cost. 
C) indirect material cost. 
D) opportunity cost. 
A) period cost. 
B) direct material cost. 
C) indirect material cost. 
D) opportunity cost.

Question 10

Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers.Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle?

Accepted Answer

The answer of Rotonga Manufacturing Company leases a vehicle to...

Question 11

Paolucci Corporation's relevant range of activity is 4,000 units to 8,000 units.When it produces and sells 6,000 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) $17.15 
B) $11.00 
C) $14.00 
D) $12.50 
A) $17.15 
B) $11.00 
C) $14.00 
D) $12.50

Question 12

If the selling price is $25.00 per unit, the contribution margin per unit sold is closest to:

Accepted Answer

A) $13.45 
B) ($0.50) 
C) $5.40 
D) $15.95 
A) $13.45 
B) ($0.50) 
C) $5.40 
D) $15.95

Question 13

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Accepted Answer

A) $14,600 
B) $17,600 
C) $11,600 
D) $23,600 
A) $14,600 
B) $17,600 
C) $11,600 
D) $23,600

Question 14

Which of the following statements is true when referring to fixed costs?

Accepted Answer

A) Committed fixed costs arise from the annual decisions by management. 
B) As volume increases, unit fixed cost and total fixed cost will change. 
C) Fixed costs increase in total throughout the relevant range. 
D) Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company. 
A) Committed fixed costs arise from the annual decisions by management. 
B) As volume increases, unit fixed cost and total fixed cost will change. 
C) Fixed costs increase in total throughout the relevant range. 
D) Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company.

Question 15

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:

Accepted Answer

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

Question 16

If 8,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Accepted Answer

A) $14,000 
B) $93,200 
C) $89,100 
D) $103,100 
A) $14,000 
B) $93,200 
C) $89,100 
D) $103,100

Question 17

The cost of goods sold for June was:

Accepted Answer

A) $128,000 
B) $181,000 
C) $122,000 
D) $134,000 
A) $128,000 
B) $181,000 
C) $122,000 
D) $134,000

Question 18

If the selling price is $21.90 per unit, the contribution margin per unit sold is closest to:

Accepted Answer

A) $9.35 
B) $12.60 
C) $8.45 
D) $5.65 
A) $9.35 
B) $12.60 
C) $8.45 
D) $5.65

Question 19

In May direct labor was 60% of conversion cost.If the manufacturing overhead for the month was $54,000 and the direct materials cost was $30,000, the direct labor cost was:

Accepted Answer

A) $36,000 
B) $20,000 
C) $81,000 
D) $45,000 
A) $36,000 
B) $20,000 
C) $81,000 
D) $45,000

Question 20

When the level of activity decreases within the relevant range, the fixed cost per unit will:

Accepted Answer

A) decrease. 
B) increase. 
C) remain the same. 
D) The effect cannot be predicted. 
A) decrease. 
B) increase. 
C) remain the same. 
D) The effect cannot be predicted.

Exam 1: Managerial Accounting and Cost Concepts

The contribution margin for October is:

Wippert Corporation, a merchandising company, reported the following results for December: Required: a.Prepare a traditional format income statement for December. b.Prepare a contribution format income statement for December.

Selling and administrative expenses are period costs under generally accepted accounting principles.

The contribution format income statement is used as an internal planning and decision-making tool.Its emphasis on cost behavior aids cost-volume-profit analysis, management performance appraisals, and budgeting.

Given the cost formula, Y = $16,000 + $3.40X, total cost for an activity level of 4,000 units would be:

Direct labor cost is classified as:

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

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

The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n):

Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers.Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle?

Paolucci Corporation's relevant range of activity is 4,000 units to 8,000 units.When it produces and sells 6,000 units, its average costs per unit are as follows: If 5,000 units are sold, the variable cost per unit sold is closest to:

If the selling price is $25.00 per unit, the contribution margin per unit sold is closest to:

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Which of the following statements is true when referring to fixed costs?

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:

If 8,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

The cost of goods sold for June was:

If the selling price is $21.90 per unit, the contribution margin per unit sold is closest to:

In May direct labor was 60% of conversion cost.If the manufacturing overhead for the month was $54,000 and the direct materials cost was $30,000, the direct labor cost was:

When the level of activity decreases within the relevant range, the fixed cost per unit will:

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Financial Statement Analysis

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

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