Question 1

To the nearest whole cent, what should be the average property tax per unit at a sales volume of 27,600 units? (Assume that this sales volume is within the relevant range.)

Accepted Answer

A) $6.73 
B) $7.70 
C) $7.62 
D) $7.53

Question 2

The salary of the president of a manufacturing company would be classified as which of the following?

Accepted Answer

A) Product cost 
B) Period cost 
C) Manufacturing overhead 
D) Direct labor

Question 3

When the level of activity increases, total variable cost will increase.

Accepted Answer

A) True 
 B)False

Question 4

A decrease in production will ordinarily result in an increase in fixed production costs per unit.

Accepted Answer

A) True 
 B)False

Question 5

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

Accepted Answer

A) $40,000 
B) $34,000 
C) $141,000 
D) $78,000

Question 6

In any decision making situation, sunk costs are irrelevant and should be ignored.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements regarding fixed costs is incorrect?

Accepted Answer

A) Expressing fixed costs on a per unit basis usually is the best approach for decision making. 
B) Fixed costs expressed on a per unit basis will decrease with increases in activity. 
C) Total fixed costs are constant within the relevant range. 
D) Fixed costs expressed on a per unit basis will increase with decreases in activity.

Question 8

Which of the following costs is an example of a period rather than a product cost?

Accepted Answer

A) Depreciation on production equipment. 
B) Wages of salespersons. 
C) Wages of production machine operators. 
D) Insurance on production equipment.

Question 9

The total of the product costs listed above for November is:

Accepted Answer

A) $77,000 
B) $348,000 
C) $592,000 
D) $244,000

Question 10

Committed fixed costs are fixed costs that are not controllable.

Accepted Answer

A) True 
 B)False

Question 11

Although the contribution format income statement is useful for external reporting purposes, it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs.

Accepted Answer

A) True 
 B)False

Question 12

Gambarini 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 $197.80 per unit.  The best estimate of the total monthly fixed cost is:

Accepted Answer

A) $541,800 
B) $1,192,100 
C) $1,099,200 
D) $1,145,650

Question 13

What is the total amount of the costs listed above that are NOT direct costs of the Brentwood Store?

Accepted Answer

A) $152,000 
B) $92,000 
C) $79,000 
D) $38,000

Question 14

To the nearest whole cent, what should be the average cost of operating the helpline per call at a volume of 36,100 calls in a month? (Assume that this call volume is within the relevant range.)

Accepted Answer

A) $21.54 
B) $20.57 
C) $21.34 
D) $22.50

Question 15

Which of the following would NOT be treated as a product cost for external financial reporting purposes?

Accepted Answer

A) Depreciation on a factory building. 
B) Salaries of factory workers. 
C) Indirect labor in the factory. 
D) Advertising expenses.

Question 16

Aberge Company's manufacturing overhead is 60% of its total conversion costs. If direct labor is $38,000 and if direct materials are $21,000, the manufacturing overhead is:

Accepted Answer

A) $57,000 
B) $88,500 
C) $25,333 
D) $31,500

Question 17

Anaconda Mining Company shipped 9,000 tons of copper concentrate for $450,000 in March and 11,000 tons for $549,000 in April. Shipping costs for 12,000 tons to be shipped in May would be expected to be:

Accepted Answer

A) $548,780 
B) $549,020 
C) $594,000 
D) $598,500

Question 18

The cost of goods sold for September was:

Accepted Answer

A) $132,000 
B) $134,000 
C) $133,000 
D) $200,000

Question 19

In a contribution format income statement for a merchandising company, cost of goods sold is a variable cost that gets included in the "Variable expenses" portion of the income statement.

Accepted Answer

A) True 
 B)False

Question 20

The following data pertains to activity and the cost of cleaning and maintenance for two recent months:  The best estimate of the total month 1 variable cost for cleaning and maintenance is:

Accepted Answer

A) $300 
B) $500 
C) $800 
D) $100

Exam 1: Managerial Accounting and Cost Concepts

To the nearest whole cent, what should be the average property tax per unit at a sales volume of 27,600 units? (Assume that this sales volume is within the relevant range.)

The salary of the president of a manufacturing company would be classified as which of the following?

When the level of activity increases, total variable cost will increase.

A decrease in production will ordinarily result in an increase in fixed production costs per unit.

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

In any decision making situation, sunk costs are irrelevant and should be ignored.

Which of the following statements regarding fixed costs is incorrect?

Which of the following costs is an example of a period rather than a product cost?

The total of the product costs listed above for November is:

Committed fixed costs are fixed costs that are not controllable.

Although the contribution format income statement is useful for external reporting purposes, it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs.

Gambarini 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 $197.80 per unit. The best estimate of the total monthly fixed cost is:

What is the total amount of the costs listed above that are NOT direct costs of the Brentwood Store?

To the nearest whole cent, what should be the average cost of operating the helpline per call at a volume of 36,100 calls in a month? (Assume that this call volume is within the relevant range.)

Which of the following would NOT be treated as a product cost for external financial reporting purposes?

Aberge Company's manufacturing overhead is 60% of its total conversion costs. If direct labor is $38,000 and if direct materials are $21,000, the manufacturing overhead is:

Anaconda Mining Company shipped 9,000 tons of copper concentrate for $450,000 in March and 11,000 tons for $549,000 in April. Shipping costs for 12,000 tons to be shipped in May would be expected to be:

The cost of goods sold for September was:

In a contribution format income statement for a merchandising company, cost of goods sold is a variable cost that gets included in the "Variable expenses" portion of the income statement.

The following data pertains to activity and the cost of cleaning and maintenance for two recent months: The best estimate of the total month 1 variable cost for cleaning and maintenance is: