Exam 1: Managerial Accounting and Cost Concepts

The following cost data pertain to the operations of Bouffard Department Stores, Inc. , for the month of May. The Brentwood Store is just one of many stores owned and operated by the company.The Shoe Department is one of many departments at the Brentwood Store.The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are NOT direct costs of the Brentwood Store?

Supply costs at Chobot Corporation's chain of gyms are listed below: Management believes that supply cost is a mixed cost that depends on client-visits.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 contribution format is widely used for preparing external financial statements.

Farnor, Inc. , would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the last four months of operations. Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to:

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:

Depreciation on manufacturing equipment is a product cost.

The cost of factory machinery purchased last year is:

A traditional format income statement organizes costs on the basis of behavior.

Krimton Corporation's manufacturing costs last year consisted of $150, 000 of direct materials, $200, 000 of direct labor, $40, 000 of variable manufacturing overhead, and $25, 000 of fixed manufacturing overhead. Conversion cost was:

At an activity level of 6, 900 units in a month, Zelinski Corporation's total variable maintenance and repair cost is $408, 756 and its total fixed maintenance and repair cost is $230, 253.What would be the total maintenance and repair cost, both fixed and variable, at an activity level of 7, 100 units in a month? Assume that this level of activity is within the relevant range.

Management of Childers Corporation is considering whether to purchase a new model 380 machine costing $278, 000 or a new model 230 machine costing $207, 000 to replace a machine that was purchased 3 years ago for $266, 000.The old machine was used to make product R16K until it broke down last week.Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 230 machine.It has less capacity than the new model 380 machine, but its capacity is sufficient to continue making product R16K. Management also considered, but rejected, the alternative of simply dropping product R16K.If that were done, instead of investing $207, 000 in the new machine, the money could be invested in a project that would return a total of $305, 000. In making the decision to buy the model 230 machine rather than the model 380 machine, the differential cost was:

A partial listing of costs incurred during December at Rooks Corporation appears below: The total of the period costs listed above for December is:

Abare Corporation reported the following data for the month of December: The prime cost for December was:

In a contribution format income statement, the gross margin minus selling and administrative expenses equals net operating income.

Direct labor is a part of prime cost, but not conversion cost.

Comparative income statements for Tudor Retailing Company for the last two months are presented below: Which of the following classifications best describes the behavior of clerical expense?

Davis 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:

Data concerning Nelson Company's activity for the first six months of the year appear below: Using the high-low method of analysis, the estimated variable electrical cost per machine hour is:

If the level of activity increases within the relevant range: