Managerial Acct. 1
Fiori Corporation's relevant range of activity is 3,100 units to 6,500 units. When it produces and sells 4,800 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $6.70 Direct labor $3.10 Variable manufacturing overhead $1.75 Fixed manufacturing overhead $3.00 Fixed selling expense $1.05 Fixed administrative expense $0.95 Sales commissions $1.40 Variable administrative expense $0.90 The incremental manufacturing cost that the company will incur if it increases production from 5,500 to 5,501 units is closest to:
$11.55 ($6.70+3.10+1.75)
Kesterson Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $6.85 Direct labor $3.60 Variable manufacturing overhead $1.25 Fixed manufacturing overhead $10,400 Sales commissions $1.50 Variable administrative expense $0.50 Fixed selling and administrative expense $3,200 The incremental manufacturing cost that the company will incur if it increases production from 4,000 to 4,001 units is closest to:
$11.70 (6.85+3.60+1.25)
Lagle Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $4.85 Direct labor $3.90 Variable manufacturing overhead $1.55 Fixed manufacturing overhead $12,600 Sales commissions $1.90 Variable administrative expense $0.30 Fixed selling and administrative expense $7,200 If 4,500 units are sold, the variable cost per unit sold is closest to:
$12.50 ($4.85+3.90+1.55+1.90+0.30)
Kogler Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $5.20 Direct labor $5.40 Variable manufacturing overhead $2.00 Fixed manufacturing overhead $9.00 Fixed selling expense $3.80 Fixed administrative expense $1.50 Sales commissions $0.70 Variable administrative expense $0.65 If the selling price is $28.00 per unit, the contribution margin per unit sold is closest to:
$14.05 [$28.00-(5.20+5.40+2.00+0.70+0.65)]
The following cost data pertain to the operations of Quinonez Department Stores, Inc., for the month of September. Corporate headquarters building lease $87,100 Cosmetics Department sales commissions--Northridge Store $5,830 Corporate legal office salaries $63,700 Store manager's salary-Northridge Store $10,400 Heating-Northridge Store $15,200 Cosmetics Department cost of sales--Northridge Store $33,400 Central warehouse lease cost $12,500 Store security-Northridge Store $22,600 Cosmetics Department manager's salary--Northridge Store $4,340 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?
$163,300 (87,100+63,700+12,500)
Bolka Corporation, a merchandising company, reported the following results for October: Sales $433,000 Cost of goods sold (all variable) $176,100 Total variable selling expense $26,700 Total fixed selling expense $19,700 Total variable administrative expense $8,700 Total fixed administrative expense $37,300 The contribution margin for October is:
$221,500 Explanation: $433,000 $176,100 $26,700 $8,700 $211,500 -------------------------------- $221,500
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 $910,000 Cost of goods sold 565,000 Gross margin 345,000 Selling and administrative expenses Selling $120,000 Administration 144,000 264,000 Net operating income $81,000 On average, a book sells for $70. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. The contribution margin for Sam's Bookstore for the first quarter is:
$243,600 Explanation: Sales 910,000 Variable Expenses: COGS 565,000 Variable Selling 65,000 Variable Admin 36,400 666,400 Contribution Margin. 243,600 910,000 / 3 = 13,000 units $5*13,000 = 65,000 910,000*0.04 = 36,400
Pedregon Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $7.30 Direct labor $4.20 Variable manufacturing overhead $1.55 Fixed manufacturing overhead $23,400 Sales commissions $0.75 Variable administrative expense $0.85 Fixed selling and administrative expense $4,900 If 6,000 units are produced, the total amount of manufacturing overhead cost is closest to:
$32,700 [($1.55*6000)+23,400]
Schwiesow Corporation has provided the following information: Cost per UnitCost per Period Direct materials $7.50 Direct labor $4.00 Variable manufacturing overhead $1.90 Fixed manufacturing overhead $18,000 Sales commissions $1.00 Variable administrative expense $0.70 Fixed selling and administrative expense $5,800 If 8,500 units are produced, the total amount of manufacturing overhead cost is closest to:
$34,150 [($1.90*8500)+18,000]
Dake Corporation's relevant range of activity is 4,900 units to 5,500 units. When it produces and sells 5,200 units, its average costs per unit are as follows: Direct materials $6.50 Direct labor $3.70 Variable manufacturing overhead $2.10 Fixed manufacturing overhead $3.00 Fixed selling expense $1.00 Fixed administrative expense $0.70 Sales commissions $0.80 Variable administrative expense $0.70 If 5,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:
$51,000 (6.50+3.70)*5000
The following costs were incurred in May: Direct materials $42,700 Direct labor $29,400 Manufacturing overhead $27,300 Selling expenses $23,600 Administrative expenses $33,700 Conversion costs during the month totaled:
$56,700 Conversion Cost = Direct Labor + Manufacturing Overhead ($29,400 + $27,300)
At a sales volume of 42,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $596,400. To the nearest whole dollar, what should be the total sales commissions at a sales volume of 39,700 units? (Assume that this sales volume is within the relevant range.) (Round intermediate calculations to 2 decimal places.)
$563,740 Explanation: Sales Commission per unit = Total sales commission / unit sales Total sales commission = sales commission per unit * unit sales 596,400 / 42,000 = $14.20 $14.20*39,700 = $563,740
Dake Corporation's relevant range of activity is 2,300 units to 5,500 units. When it produces and sells 3,900 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $6.80 Direct labor $4.00 Variable manufacturing overhead $1.55 Fixed manufacturing overhead $2.50 Fixed selling expense $1.15 Fixed administrative expense $0.85 Sales commissions $0.95 Variable administrative expense $0.85 For financial reporting purposes, the total amount of product costs incurred to make 3,900 units is closest to:
$57,915 1. $6.80 + 4.00 + 1.55 = $12.35 2. $12.35*3900 = $48,165 3. $2.50*3900 = $9,750 4. = $48,165 + $9,750 = $57,915
Pedregon Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $6.95 Direct labor $3.50 Variable manufacturing overhead $1.75 Fixed manufacturing overhead $19,800 Sales commissions $0.40 Variable administrative expense $0.50 Fixed selling and administrative expense $7,700 If 4,500 units are sold, the total variable cost is closest to:
$58,950 [(6.95+3.50+1.75+0.40+0.50)*4500]
A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $5,490 and is paid at the beginning of the first year. Seventy percent of the premium applies to manufacturing operations and thirty percent applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage? Product Period A)$5,490 $0 B)$3,843 $1,647 C)$2,562 $1,098 D)$1,281 $549
D) $1,281 | $549 Explanation: 5490 / 3 = 1830 1830 * 0.7 = 1281 1830 * 0.3 = 549