Exam 1: Managerial Accounting and Cost Concepts

In April direct labor was 70% of conversion cost. If the manufacturing overhead for the month was $42,000 and the direct materials cost was $28,000, the direct labor cost was:

The prime cost for December was:

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

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:

If Carne Company were to sell 40,000 units, the total expected cost per unit would be:

The following data pertains to activity and maintenance cost for two recent periods: Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for maintenance cost is:

Assuming Comco uses the high-low method of analysis, the fixed cost of maintenance would be estimated to be:

Using the high-low method of analysis, the estimated variable electrical cost per machine hour is:

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

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

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

To the nearest whole cent, what should be the average cost of operating the helpline per call at a volume of 31,300 calls in a month? (Assume that this call volume is within the relevant range.)

A cost that differs from one month to another is known as a differential cost.

The following costs were incurred in April: Conversion costs during the month totaled:

Using the high-low method, the estimate of the variable component of office expense per escrow completed is closest to:

Conversion cost equals product cost less direct labor cost.

The gross margin for July is:

A number of costs are listed below. Required: For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it.

Bee Company's contribution margin for the second quarter is:

The gross margin for December is: