Exam 1: Managerial Accounting and Cost Concepts

Stott Company requires one full-time dock hand for every 500 packages loaded daily.The wages for these dock hands would be:

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:

Corcetti Company manufactures and sells prewashed denim jeans.Large rolls of denim cloth are purchased and are first washed in a giant washing machine.After the cloth is dried,it is cut up into jean pattern shapes and then sewn together.The completed jeans are sold to various retail chains. Which of the following terms could be used to correctly describe the wages paid to the workers that cut up the cloth into the jean pattern shapes?

The high-low method uses cost and activity data from just two periods to establish the formula for a mixed cost.

Inventoriable costs are also known as:

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

Comco,Inc.has accumulated the following data for the cost of maintenance on its machinery for the last four months: Assume that the relevant range includes all of the activity levels mentioned in this problem. Assuming Comco uses the high-low method of analysis,the fixed cost of maintenance would be estimated to be:

Data for Cost A and Cost B appear below: Which of the above best describes the behavior of Costs A and B?

Searls Corporation,a merchandising company,reported the following results for July: Cost of goods sold is a variable cost in this company. The contribution margin for July is:

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:

Kodama Corporation staffs a helpline to answer questions from customers.The costs of operating the helpline are variable with respect to the number of calls in a month.At a volume of 30,000 calls in a month,the costs of operating the helpline total $369,000. To the nearest whole dollar,what should be the total cost of operating the helpline costs at a volume of 33,800 calls in a month? (Assume that this call volume is within the relevant range. )

Maintenance costs at a Whetsel Corporation factory are listed below: Management believes that maintenance 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 and round off to the nearest whole cent.Compute the fixed component second and round off to the nearest whole dollar.These estimates would be closest to:

Harris 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 $84.40 per unit. The best estimate of the total variable cost per unit is:

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 NOT direct costs of the Northridge Store?

Callis 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 $141.60 per unit. The best estimate of the total monthly fixed cost is:

At a sales volume of 37,000 units,Maks Corporation's property taxes (a cost that is fixed with respect to sales volume)total $802,900. To the nearest whole cent,what should be the average property tax per unit at a sales volume of 40,300 units? (Assume that this sales volume is within the relevant range. )

Which of the following costs,if expressed on a per unit basis,would be expected to decrease as the level of production and sales increases?

Dechico Corporation purchased a machine 3 years ago for $456,000 when it launched product G92L.Unfortunately,this machine has broken down and cannot be repaired.The machine could be replaced by a new model 330 machine costing $474,000 or by a new model 260 machine costing $418,000.Management has decided to buy the model 260 machine.It has less capacity than the model 330 machine,but its capacity is sufficient to continue making product G92L.Management also considered,but rejected,the alternative of dropping product G92L and not replacing the old machine.If that were done,the $418,000 invested in the new machine could instead have been invested in a project that would have returned a total of $496,000. In making the decision to buy the model 260 machine rather than the model 330 machine,the differential cost was:

All of the following would be classified as product costs except:

A fixed cost remains constant if expressed on a unit basis.