chapter 1 accounting

At an activity level of 9,500 machine-hours in a month, Falks Corporation's total variable production engineering cost is $764,275 and its total fixed production engineering cost is $218,540. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 9,800 machine-hours in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)

102.75

The following cost data pertain to the operations of Quinonez Department Stores, Incorporated, for the month of September. Corporate headquarters building lease$ 85,600Cosmetics Department sales commissions-Northridge Store$ 5,740Corporate legal office salaries$ 66,500Store manager's salary-Northridge Store$ 18,800Heating-Northridge Store$ 17,500Cosmetics Department cost of sales-Northridge Store$ 33,000Central warehouse lease cost$ 8,100Store security-Northridge Store$ 16,600Cosmetics Department manager's salary-Northridge Store$ 4,620 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?

160,200

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year: Cost of clay used in production$ 68,000Wages paid to the workers who paint the figurines$ 95,000Wages paid to the sales manager's secretary$ 27,000Cost of junk mail advertising$ 44,000 What is the total of the direct costs above?

163,000

Schonhardt Corporation's relevant range of activity is 4,000 units to 8,000 units. When it produces and sells 6,000 units, its average costs per unit are as follows: Average Cost per UnitDirect materials$ 7.85Direct labor$ 3.40Variable manufacturing overhead$ 1.90Fixed manufacturing overhead$ 3.20Fixed selling expense$ 1.20Fixed administrative expense$ 0.90Sales commissions$ 1.00Variable administrative expense$ 0.90 If 7,000 units are produced, the total amount of fixed manufacturing cost incurred is closest to:

19,200

Kesterson Corporation has provided the following information: Cost per UnitCost per PeriodDirect materials$ 6.25 Direct labor$ 3.20 Variable manufacturing overhead$ 1.20 Fixed manufacturing overhead $ 13,200Sales commissions$ 1.20 Variable administrative expense$ 0.50 Fixed selling and administrative expense $ 3,300 If 6,500 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

21,000

Pedregon Corporation has provided the following information: Cost per UnitCost per PeriodDirect materials$ 6.80 Direct labor$ 4.00 Variable manufacturing overhead$ 1.60 Fixed manufacturing overhead $ 12,000Sales commissions$ 0.80 Variable administrative expense$ 0.85 Fixed selling and administrative expense $ 5,700 If 3,000 units are sold, the total variable cost is closest to:

42,150

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $459,000 or a new model 220 machine costing $415,000 to replace a machine that was purchased 4 years ago for $423,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L. Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $415,000 in the new machine, the money could be invested in a project that would return a total of $433,000. In making the decision to buy the model 220 machine rather than the model 370 machine, the sunk cost was:

423,000

Perteet Corporation's relevant range of activity is 6,600 units to 13,000 units. When it produces and sells 9,800 units, its average costs per unit are as follows: Average Cost per UnitDirect materials$7.30Direct labor$3.70Variable manufacturing overhead$1.80Fixed manufacturing overhead$3.10Fixed selling expense$0.70Fixed administrative expense$0.40Sales commissions$0.50Variable administrative expense$0.55 If 7,400 units are produced, the total amount of manufacturing overhead cost is closest to:

43,700

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $459,000 or a new model 220 machine costing $415,000 to replace a machine that was purchased 4 years ago for $423,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L. Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $415,000 in the new machine, the money could be invested in a project that would return a total of $36,000. In making the decision to buy the model 220 machine rather than the model 370 machine, the differential cost was:

44,000

The following cost data pertain to the operations of Quinonez Department Stores, Incorporated, for the month of September. Corporate headquarters building lease$ 78,700Cosmetics Department sales commissions-Northridge Store$ 5,730Corporate legal office salaries$ 64,400Store manager's salary-Northridge Store$ 19,000Heating-Northridge Store$ 12,800Cosmetics Department cost of sales-Northridge Store$ 36,700Central warehouse lease cost$ 10,800Store security-Northridge Store$ 20,100Cosmetics Department manager's salary-Northridge Store$ 4,270 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?

46,700

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $534,000 or a new model 220 machine costing $422,000 to replace a machine that was purchased 5 years ago for $473,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L. Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $422,000 in the new machine, the money could be invested in a project that would return a total of $469,000. In making the decision to invest in the model 220 machine, the opportunity cost was:

469,000

During the month of May, direct labor cost totaled $9,150 and direct labor cost was 30% of prime cost. If total manufacturing costs during May were $78,400, the manufacturing overhead was:

47,900

During the month of May, direct labor cost totaled $15,785 and direct labor cost was 55% of prime cost. If total manufacturing costs during May were $78,100, the manufacturing overhead was:

49,400

The following costs were incurred in May: Direct materials$39,300Direct labor$23,600Manufacturing overhead$22,200Selling expenses$14,000Administrative expense$30,800 Prime costs during the month totaled:

62,900

The cost of electricity for running production equipment is classified as:

Conversion cost: yes, Period cost: no

Which of the following is an example of a period cost in a company that makes clothing? -Factory supervisor's salary. -Advertising cost for a new line of clothing. -Fabric used to produce men's pants. -Monthly depreciation on production equipment.

Advertising cost for a new line of clothing.

The costs of direct materials are classified as:

Conversion cost: no, Manufacturing cost: yes, Prime cost: yes

Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers. Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle?

Direct cost: no, Fixed cost: yes

Which of the following statements is true when referring to fixed costs? -Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company. -Committed fixed costs arise from the annual decisions by management. -As volume increases, unit fixed cost and total fixed cost will change. -Fixed costs increase in total throughout the relevant range.

Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company.

As the level of activity increases, how will a mixed cost in total and per unit behave?

Increase in total, decrease per unit

Comparative income statements for Boggs Sports Equipment Company for the last two months are presented below: All of the company's costs are either fixed, variable, or a mixture of the two (that is, mixed). Assume that the relevant range includes all of the activity levels mentioned in this problem. Which of the selling and administrative expenses of the company is variable?

Sales commissions

Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory? -The amount paid to the individual who stains a chair -The cost of the glue in a chair. -The workman's compensation insurance of the supervisor who oversees production. -The factory utilities of the department in which production takes place.

The amount paid to the individual who stains a chair.

An example of a committed fixed cost is:

a long-term equipment lease.

All of the following are examples of product costs except: -rental costs of factory equipment. -salary of the plant manager. -depreciation on the company's retail outlets. -insurance on the factory equipment.

depreciation on the company's retail outlets.

Within the relevant range, variable costs can be expected to:

vary in total in direct proportion to changes in the activity level.