Exam 1: Managerial Accounting and Cost Concepts

Jumpst Corporation uses the cost formula Y = $3,600 + $0.30X for the maintenance cost in Department B, where X is machine-hours. The August budget is based on 20,000 hours of planned machine time. Maintenance cost expected to be incurred during August is:

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

The contribution margin for April is:

Blore Corporation reports that at an activity level of 7,300 units, its total variable cost is $511,803 and its total fixed cost is $76,650. What would be the total cost, both fixed and variable, at an activity level of 7,500 units? Assume that this level of activity is within the relevant range.

To the nearest whole dollar, what should be the total property taxes at a sales volume of 30,900 units? (Assume that this sales volume is within the relevant range.)

Indirect costs, such as manufacturing overhead, are always fixed costs.

In external financial reports, factory utilities costs may be included in an asset account on the balance sheet at the end of the period.

A variable cost is a cost whose cost per unit varies as the activity level rises and falls.

The prime cost for April was:

Utility costs at one of Helker Corporation's factories are listed below: Management believes that utility cost is a mixed cost that depends on machine-hours. Required: Estimate the variable cost per machine-hour and the fixed cost per month using the high-low method. Show your work! Round off all calculations to the nearest whole cent.

Which one of the following costs should NOT be considered a direct cost of serving a particular customer who orders a customized personal computer by phone directly from the manufacturer?

Honey Corporation, a merchandising company, reported the following results for January: Cost of goods sold is a variable cost in this company. Required: a. Prepare a traditional format income statement for January. b. Prepare a contribution format income statement for January.

The following costs should be considered direct costs of providing delivery room services to a particular mother and her baby: the costs of drugs administered in the operating room, the attending physician's fees, and a portion of the liability insurance carried by the hospital to cover the delivery room.

What would be the total variable maintenance cost at an activity level of 5,600 machine-hours in a month? Assume that this level of activity is within the relevant range.

Conversion cost consists of which of the following?

Corio Corporation reports that at an activity level of 3,800 units, its total variable cost is $221,464 and its total fixed cost is $94,848. Required: For the activity level of 3,900 units, compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the average total cost per unit. Assume that this activity level is within the relevant range.

Manufacturing overhead combined with direct materials is known as conversion cost.

Anderwald Corporation has provided the following production and average 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:

What would be the average fixed inspection cost per unit at an activity level of 8,100 machine-hours in a month? Assume that this level of activity is within the relevant range.

The total of the manufacturing overhead costs listed above for December is: