Exam 1: Managerial Accounting and Cost Concepts

At a volume of 8,000 units, Pwerson Company incurred $32,000 in factory overhead costs, including $12,000 in fixed costs. If volume increases to 9,000 units and both 8,000 units and 9,000 units are within the relevant range, then the company would expect to incur total factory overhead costs of:

Discretionary fixed costs:

A partial listing of costs incurred at Falkenberg Corporation during October appears below: Required: a. What is the total amount of product cost listed above? Show your work. b. What is the total amount of period cost listed above? Show your work.

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

In describing the cost equation, Y = a + bX, "a" is:

The planning horizon for a committed fixed cost usually encompasses many years.

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:

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:

Sobota Corporation has provided the following partial listing of costs incurred during August: Required: a. What is the total amount of product cost listed above? Show your work. b. What is the total amount of period cost listed above? Show your work.

Property taxes on a manufacturing facility are classified as:

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.

Using the high-low method of analysis, the estimated monthly fixed component of the electrical cost is:

Gambino 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 $138.80 per unit. The best estimate of the total monthly fixed cost is:

What would be the average fixed maintenance cost per unit at an activity level of 8,600 machine-hours in a month? Assume that this level of activity is within the relevant range.

The best estimate of the total monthly fixed manufacturing cost is:

Younger Corporation reports that at an activity level of 8,700 units, its total variable cost is $653,109 and its total fixed cost is $658,416. Required: For the activity level of 8,800 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.

The potential benefit that is given up when one alternative is selected over another is called an opportunity cost.

Assume that the cafeteria expects to serve 1,850 meals during Week 8. Using the high-low method, the expected total cost of the cafeteria would be:

At an activity level of 8,800 units, Pember Corporation's total variable cost is $146,520 and its total fixed cost is $219,296. Required: For the activity level of 8,900 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.

A direct cost is a cost that cannot be easily traced to the particular cost object under consideration.