Exam 1: Managerial Accounting and Cost Concepts

Shaw Supply Company sells a single product and has the following average costs at a sales level of 15,000 units: Required: Determine the following amounts at a sales level of 18,000 units: a. Total variable cost b. Total fixed cost c. Variable cost per unit d. Fixed cost per unit e. Total cost per unit

Calip Corporation, a merchandising company, reported the following results for October: The gross margin for October is:

Selling costs can be either direct or indirect costs.

Property taxes on a manufacturing facility are classified as:

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total cost to manufacture 1,200 units is closest to:

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total monthly fixed manufacturing cost is:

Bee Company is a honey wholesaler. An income statement and other data for the second quarter of the year are given below: Bee Company's net operating income for the second quarter using the contribution approach is:

Bee Company is a honey wholesaler. An income statement and other data for the second quarter of the year are given below: If 24,000 units are sold during the third quarter and this activity is within the relevant range, Bee Company's expected contribution margin would be:

Baker Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total monthly fixed manufacturing cost is:

Baker Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. Production volume 1.000 units 3.000 units Direct materials \ 30.90 per unit \ 30.90 per unit Direct labor \ 40.20 per unit \ 40.20 per unit Manufacturing overhead \ 64.60 per unit \ 33.80 per unit The best estimate of the total variable manufacturing cost per unit is:

Electrical costs at one of Kantola Corporation's factories are listed below: Management believes that electrical cost is a mixed cost that depends on machine-hours. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. Those estimates are closest to:

Ricwy Corporation uses the cost formula Y = $4,800 + $0.40X for the maintenance cost, where X is machine-hours. The August budget is based on 9,000 hours of planned machine time. Maintenance cost expected to be incurred during August is:

The property taxes on a factory building would be an example of:

Cardillo Inc., an escrow agent, has provided the following data concerning its office expenses: Management believes that office expense is a mixed cost that depends on the number of escrows completed. Note: Real estate purchases usually involve the services of an escrow agent that holds funds and prepares documents to complete the transaction. Using the high-low method, the estimate of the fixed component of office expense per month is closest to:

The nursing station on the fourth floor of Central Hospital is responsible for the care of orthopedic surgery patients. The costs of prescription drugs administered by the nursing station to patients should be classified as:

Ence Sales, Inc., a merchandising company, reported sales of 6,400 units in April at a selling price of $684 per unit. Cost of goods sold, which is a variable cost, was $455 per unit. Variable selling expenses were $30 per unit and variable administrative expenses were $40 per unit. The total fixed selling expenses were $156,800 and the total administrative expenses were $260,400. The gross margin for April was:

Bee Company is a honey wholesaler. An income statement and other data for the second quarter of the year are given below: Bee Company's cost formula for total selling and administrative expenses, with "X" equal to the number of units sold would be:

Werner Brothers, Inc., used the high-low method to derive its cost formula for electrical power cost. According to the cost formula, the variable cost per unit of activity is $2 per machine-hour. Total electrical power cost at the high level of activity was $9,400 and at the low level of activity was $9,000. If the high level of activity was 2,200 machine hours, then the low level of activity was:

Bee Company is a honey wholesaler. An income statement and other data for the second quarter of the year are given below: Bee Company's contribution margin for the second quarter is:

Eddy Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total variable manufacturing cost per unit is: