Exam 1: Managerial Accounting and Cost Concepts

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.

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

Which of the following is an example of a cost that is variable with respect to the number of units produced?

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:

Iaci Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $133.60 per unit. The best estimate of the total contribution margin when 4,300 units are sold is:

When the activity level declines within the relevant range,what should happen with respect to the following?

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:

Which of the following costs is classified as a prime cost?

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:

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:

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

Conversion cost is the sum of direct labor cost and direct materials cost.

Inspection costs at one of Iuliano Corporation's factories are listed below: Management believes that inspection cost is a mixed cost that depends on units produced. Using the high-low method,the estimate of the variable component of inspection cost per unit produced is closest to:

Selling costs can be either direct or indirect costs.

The following cost data pertain to the operations of Rademaker Department Stores,Inc. ,for the month of March. The Northridge Store is just one of many stores owned and operated by the company.The Cosmetics Department is one of many departments at the Northridge Store.The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?

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. Prime cost was:

Anderson 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:

Given the cost formula,Y = $7,000 + $1.80X,total cost for an activity level of 4,000 units would be:

Erkkila Inc.reports that at an activity level of 6,400 machine-hours in a month,its total variable inspection cost is $423,680 and its total fixed inspection cost is $154,368. What would be the total variable inspection cost at an activity level of 6,700 machine-hours 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 sunk cost was: