acc 202 1

The following information is for a product manufactured and sold by the Longaberger Company: Sales price per unit: $75 Variable cost per unit: $25 Total annual fixed costs: $150,000 1.Calculate the contribution margin per unit 2.Calculate the contribution margin ratio. 3.How many units must Crane sell to break-even? 4.How many units must Crane sell to achieve a profit of $30,000? 5.If sales increase by $100,000, how much will profit increase?

1. cont marg per unit= 75-25=50 2. cont marg ratio= (75-25)/75=67% 3.sales in units to break even= 150,000/50=3,000units 4.sale in units to earn profit of 30,000 (30,000+150,000)/50=3,600 units 5. increase in sales of $100,000 will increase profit =100,000*67%=$67,000

The following information is provided for Steinberg Company: sal rev 250,000 var manu cost 85,000 fixed manu cost 75,000 var sell and gen cost 30,000 fixed sell+gen cost 25,000 What is this company's contribution margin?

135,000

During its first year of operations, Farmer Company paid $30,000 for direct materials and $50,000 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $15,000. General, selling, and administrative expenses were $20,000. The average cost to produce one unit was $5.00. How many units were produced during the period?

19000

Burke Company has a break-even of $600,000 in total sales. Assuming the company sells its product for $50 per unit, what is its margin of safety in units if sales total $800,000?

4,000

Parker Company pays its sales staff a base salary of $4,000 a month plus a $3.00 commission for each product sold. If a salesperson sells 600 units of product in January, the employee would be paid:

5800

What is the formula for calculating contribution margin ratio?

Contribution margin/sales

Which of the following costs is not considered to be a product cost? -Raw materials costs -Depreciation of delivery vehicles -Wages paid to production workers -Freight paid on a purchase of raw materials

Depreciation of delivery vehicles

Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner are treated as:

Overhead

Managerial accounting information is limited or restricted by which of the following authorities or principles?

Value-Added Principle

An increase in total fixed costs lowers the break-even point.

false

Contribution margin can only be determined if costs are separated into product and period costs.

false

Managerial accounting is designed to satisfy needs of external users including creditors, investors, and governmental agencies.

false

Larry's Lawn Care incurs significant gasoline costs. This cost would be classified as a variable cost if the total gasoline cost:

increases in direct proportion to the number of hours the lawn equipment is operated

All of the following are features of managerial accounting except: -information is historically based and reported annually. -information includes economic and non-financial data as well as financial data. -information is provided primarily to insiders such as managers. -information is reported continuously with a present or future orientation

information is historically based and reported annually.

class of cost:advert exp product or period cost? fixed variable or mixed?

period, fixed

class of cost: salary outside sales force product or period cost? fixed variable or mixed?

period,fixed

class of cost: fork lift driver product or period cost? fixed variable or mixed?

product, fixed

class of cost: plant supervisor salary product or period cost? fixed variable or mixed?

product, fixed

class of cost: depr on factory product or period cost? fixed variable or mixed?

product,fixed

class of cost: electricity for plant equip product or period cost? fixed variable or mixed?

product,mixed

class of cost: iron engine castings product or period cost? fixed variable or mixed?

product,variable

class of cost:assembly line worker wages product or period cost? fixed variable or mixed?

product,variable

Knox Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During 2011, the high point in activity occurred in June when it produced 200 boats at a total cost of $140,000. The low point in production occurred in January when it produced 40 boats at a total cost of $44,000. 1.Use the high-low method to estimate the total fixed cost and the variable cost per hour. 2.Determine the total estimated cost of 100 boats are made.

total cost= a+bX a=fixed total cost b=unit variable cost x= var cost per hour (feb cost-june cost)(feb boats-june boats) (140,000-44,000)/(200-40)=600 per unit fixed cost= total cost - var cost fixed cost= 140,000-(200*600) fixed cost = 20,000 total cost= fixed cost +(var cost per unit*num of units) total cost= 20,000+(600*100) =80,000

The contribution margin format income statement classifies costs according to their behavior patterns.

true

The managerial accounting system includes economic and non-financial data as well as financial statement data.

true