Accounting 102: all quizzes

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At an activity level of 8,400 units in a month, Braughton Corporation's total variable maintenance and repair cost is $697,284 and its total fixed maintenance and repair cost is $464,100. What would be the total maintenance and repair cost, both fixed and variable, at an activity level of 8,500 units in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)

1,169,685 Variable cost per unit = $697,284 ÷ 8,400 units = $83.01 per unit Total cost = Total fixed cost + Total variable cost = $464,100 + ($83.01 per unit × 8,500 units) = $464,100 + $705,585 = $1,169,685

Which of the following is an example of a period cost in a company that makes clothing?

Advertising cost for a new line of clothing.

Property taxes on a company's factory building would be classified as a(n):

product cost

The following cost data pertain to the operations of Quinonez Department Stores, Inc., for the month of September. Corporate headquarters building lease $ 82,400 Cosmetics Department sales commissions--Northridge Store $ 5,860 Corporate legal office salaries $ 64,200 Store manager's salary-Northridge Store $ 19,900 Heating-Northridge Store $ 18,500 Cosmetics Department cost of sales--Northridge Store $ 34,500 Central warehouse lease cost $ 8,000 Store security-Northridge Store $ 19,700 Cosmetics Department manager's salary--Northridge Store $ 4,490 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?

154,600 Costs that are not direct costs of the Northridge Store = Corporate headquarters building lease + Corporate legal office salaries + Central warehouse lease cost = $82,400 + $64,200 + $8,000 = $154,600

An income statement for Sam's Bookstore for the first quarter of the year is presented below: Sam's Bookstore Income Statement For Quarter Ended March 31 Sales $ 980,000 Cost of goods sold 680,000 Gross margin 300,000 Selling and administrative expenses Selling $ 110,000 Administration 124,000 234,000 Net operating income $ 66,000 On average, a book sells for $70. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed. The contribution margin for Sam's Bookstore for the first quarter is:

214,600 Unit sales = $980,000 ÷ $70 per book = 14,000 books

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $360,000 or a new model 220 machine costing $340,000 to replace a machine that was purchased 7 years ago for $348,000. 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 $340,000 in the new machine, the money could be invested in a project that would return a total of $411,000. In making the decision to invest in the model 220 machine, the opportunity cost was:

411,000 Opportunity cost = Return from alternative investment = $411,000

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $502,000 or a new model 220 machine costing $443,000 to replace a machine that was purchased 11 years ago for $470,000. 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 $443,000 in the new machine, the money could be invested in a project that would return a total of $487,000. In making the decision to buy the model 220 machine rather than the model 370 machine, the sunk cost was:

470,000 Sunk cost = Cost of old machine = $470,000

Pedregon Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.60 Direct labor $ 3.60 Variable manufacturing overhead $ 1.40 Fixed manufacturing overhead $ 23,400 Sales commissions $ 0.60 Variable administrative expense $ 0.65 Fixed selling and administrative expense $ 3,000 If 6,500 units are sold, the total variable cost is closest to:

83,525

Which costs will change with a decrease in activity within the relevant range?

Unit fixed costs and total variable cost.

An example of a committed fixed cost is:

a long-term equipment lease

Which of the following costs is classified as both a prime cost and a conversion cost?

direct labor

In the standard cost formula Y = a + bX, what does the "X" represent?

the level of activity


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