Test 2 Managerial

A method of assigning overhead costs to a product using a single overhead rate is:

Plantwide overhead rate method.

The cost object of the plantwide overhead rate method is:

The unit of product

Calculate the approximate fixed cost component of Tanner's overhead costs using the high- low method.

$ 408

Tanner Inc. has incurred the following overhead costs over a six-week period: Using the high-low method, calculate the variable cost component of these overhead costs (round to the nearest two decimal places).

$ 6.56/hr

If Tanner expects to have 65 hours of machine time in a future week, what overhead costs could they expect to incur?

$ 834

Management of a company is evaluating two potential orders. Due to limited capacity only one of these orders can be accepted. Incremental fixed costs are the same for either option. Based on the information in the table below, which of the following statements is true?

Option B has the highest total contribution margin.

Schmidt Inc, manufactures inexpensive cameras that sell for $50. Fixed costs are $720,000 and variable costs are $30.00 per unit. Schmidt can buy a newer production machine that will increase fixed costs by $14,400 per year but will increase variable costs by 10% per unit. What are the original and the new break-even points in this situation?

Original $36,000; New $43,200.

Which of the following is true?

Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor.

A CVP graph presents data on:

Profit, loss, and break-even on a total dollar basis

Which of the following pair of journal entries correctly records the current month's activity where $125,000 of raw material was purchased for cash, and $75,000 of direct material and $30,000 of indirect materials were used in the production process?

Raw Materials Inventory 125,000 Cash 125,000 Goods in Process Inventory 75,000 Factory Overhead 30,000 Raw Materials Inventory 105,000

Which of the following pair of journal entries correctly records the current month's activity where $250,000 of raw material was purchased for cash and $150,000 of direct material and $60,000 of indirect materials were used in the production process?

Raw Materials Inventory 250,000 Cash 250,000 Goods in Process Inventory 150,000 Factory Overhead 60,000 Raw Materials Inventory 210,000

A term describing a firm's normal range of operating activities is:

Relevant range of operations

A company's normal operating range, which excludes extremely high and low volumes that are not likely to occur, is called the:

Relevant range.

The ratio of the sales volume for the various products sold by a company is called the:

Sales mix.

A graph used to analyze past cost behaviors by displaying costs and volume levels for each period as points on the diagram is called a:

Scatter diagram.

Which of the following statements is true

Sending blood work to the lab is a batch level activity.

A cost that remains constant over a limited range of volume but increases by a lump sum when volume increases beyond a maximum amount is a(n):

Step-wise cost

Which of the following statements is true regarding this company's activity rates?

The activity rate under the activity-based costing system for Activity 2 is $1.50.

Which of the following is a disadvantage of the departmental overhead rate method?

The departmental overhead rate method assigns overhead on the basis of volume-related measures.

Which of the following is not true?

The departmental overhead rate method does not assign overhead on the basis of volume- related measures.

Which of the following are advantages of using the plantwide overhead rate method?

The necessary information is readily available

Equivalent units of production are equal to:

The number of units that could have been completed if all effort had been applied to units that were started and completed that period.

To compute an equivalent unit of production, one must be able to reasonably estimate:

The percentage of completion

Which of the following statements is true with regard to activity-based costing rates?

The premise of ABC is that activities are what cause costs to be incurred.

The cost object(s) of the activity-based costing method is(are):

The production activities in the first stage and the unit of product in the second stage.

The cost object(s) of the departmental overhead rate method is:

The production departments in the first stage and the unit of product in the second stage.

Which of the following statements is true with regard to the plantwide overhead rate method?

The rate is determined using volume-related measures

After posting all actual factory overhead and applying factory overhead to production departments in a process costing system:

There may be over or underapplied overhead

Which one of the following statements is not true?

Total variable costs decrease as the volume increases

What are the main advantages of traditional volume-based allocation methods compared to activity-based costing?

Traditional volume-based methods are easier to use and less costly to implement and maintain.

When graphing cost-volume-profit data on a CVP chart:

Units are plotted on the horizontal axis; costs on the vertical axis.

A cost that changes in total proportionately to changes in volume of activity is a(n):

Variable cost

Curvilinear costs always increase:

When volume increases but not at a constant rate.

A firm sells two products, A and B. For every unit of A the firm sells, two units of B are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow: The weighted-average contribution margin is:

$17.33

Use the following information to determine the margin of safety in dollars:

$173,600

A company estimates that overhead costs for the next year will be $9,234,000 for indirect labor and $156,800 for factory utilities. The company uses machine hours as its overheadallocation base. If 500,000 machine hours are planned for this next year, what is the company's plantwide overhead rate? (Round to two decimal places)

$18.78 per machine hour.

Heritage Industries uses departmental overhead rates and is planning on a $2 per machine hour overhead rate for the molding department. Compute the estimated manufacturing overhead cost for the molding department given the information shown in the table.

$195,000

Heritage Industries uses departmental overhead rates and is planning on a $3 per direct labor hour overhead rate for the molding department. Compute the estimated manufacturing overhead cost for the molding department given the information shown in the table.

$195,000

Hou Company applies factory overhead to its production departments on the basis of 90% of direct labor costs. In the Assembly Department, Hou had $125,000 of direct labor cost, and in the Finishing Department, Hou had $35,000 of direct labor cost. The entry to apply overhead to these production departments is:

Work in Process - Assembly 112,500 Work in Process - Finishing 31,500 Factory Overhead 144,000

If a firm's forecasted sales are $250,000 and its break-even sales are $190,000, the margin of safety (in dollars) is:

$60,000

Camden Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: Total fixed costs are $340,000. The break-even point in sales dollars for the current sales mix is:

$629,000

If Willco Inc. expects to operate the machines for a total of 32,000 hours in the next month, calculate the expected maintenance costs?

$63,947

Jet Company's break-even point is 5,000 units. The company's fixed costs are $240,000, and its total variable costs are $85,000. The unit sales price is:

$65

A firm expects to sell 25,000 units of its product at $11 per unit. Pretax income is predicted to be $60,000. If the variable costs per unit are $6, total fixed costs must be:

$65,000

A company has a contribution margin per unit of $8.25 and a contribution margin ratio of 12%. What is the selling price of the product?

$68.75

A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000.

$7.00

The Haskins Company manufactures and sells radios. Each radio sells for $23.75 and the variable cost per unit is $16.25. Haskin's total fixed costs are $25,000, and budgeted sales are 8,000 units. What is the contribution margin per unit?

$7.50

Use the data for Wall Nuts, Inc. to compute the dollar amount of overhead applied to each unit of oak paneling, assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B.

$8.70

At Flint Company's break-even point of 9,000 units, fixed costs are $180,000, and variable costs are $540,000 in total. The unit sales price is:

$80

Lake Prairie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 500,000 units are expected to be produced taking .75 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

$9.25 per unit

What are the activity rates for the three activities under activity based costing?

(1) $2.00; (2) $1.50; (3) $16.00.

A company manufactures and sells a product for $150 per unit. The company's fixed costs are $68,200, and its variable costs are $95 per unit. The company's break-even point in units is:

1,240 units/$186,000

A company wishes to earn a pretax income equal to 35% of total fixed costs. Its product sells for $50.75 per unit. Total fixed costs equal $156,800 and variable costs per unit are $32.50. How many units must this company sell to meet its goal? (Round answer to complete units.)

11,599

Conan Company has total fixed costs of $112,000. Its product sells for $35 per unit and variable costs amount to $25 per unit. Next year Conan Company wishes to earn a pretax income that equals 10% of fixed costs. How many units must be sold to achieve this target income level?

12,320

A company manufactures and sells a product for $91 per unit. The company's fixed costs are $859,716 and its variable costs are $25 per unit. The company's break-even point in units is:

13,026

The break-even point in units is:

14,000

Que Corporation uses a process cost accounting system. The company manufactured certain goods at a cost of $800 and sold them on credit to Are Corporation for $1,075. The complete journal entry to be made by Que at the time of this sale is:

Accounts Receivable—Are Corporation 1,075 Cost of Goods Sold 800 Sales 1,075 Finished Goods Inventory 800

From an ABC perspective, what causes costs to be incurred?

Activities

In a process costing operation, the direct labor of a production department includes:

All labor used exclusively by that department, even if the labor is not applied to the product itself.

A cost-volume-profit chart is also known as a(n)

Break-even chart.

A special case of cost-volume-profit analysis is:

Break-even point.

The sales level at which a company neither earns a profit nor incurs a loss is the:

Break-even point.

Overhead costs:

Cannot be traced to units of product in the same way that direct labor can

The difference between sales price per unit and variable cost per unit is the:

Contribution margin per unit

The contribution margin per unit expressed as a percentage of the product's selling price is the:

Contribution margin ratio.

Which of the following would not be considered a product cost?

Cost accountant's salary

An important tool in predicting the volume of activity, the costs to be incurred, the sales to be earned, and the profit to be received is:

Cost-volume-profit analysis.

Which of the following is true when computing cost per equivalent unit in a FIFO process costing system?

Costs incurred in the current period are divided by the equivalent units of production.

All of the following are examples of facility sustaining costs except:

Costs of sampling product quality.

A cost that changes with volume, but not at a constant rate, is called a:

Curvilinear cost

Cost-volume-profit analysis is based on three basic assumptions. Which of the following is not one of these assumptions?

Curvilinear costs change proportionately with changes in volume throughout the relevant range.

The purchase of raw materials on account in a process costing system is recorded with a:

Debit to Raw Materials Inventory and a credit to Accounts Payable.

Total contribution margin in dollars divided by pretax income is the:

Degree of operating leverage.

Which types of overhead allocation methods result in the use of more than one overhead rate during the same time period?

Departmental overhead rate method and activity-based costing

Aurora Corporation produces outdoor security lighting products. All products go through three processes before completion. Use the expected overhead costs and related data shown below to compute departmental overhead rates based on machine hours in Department A1A; based on direct labor hours in Department B2B; and machine hours in Department C3C.

Dept. A: $10 per MH; Dept B: $2 per DLH; Dept C: $4 per MH.

Which of the following is not one of the four steps in accounting for production activity in a period?

Determine over-or undersupplied overhead.

What is the reason for pooling costs?

Determining a pool rate for all costs incurred by the same activity reduces the number of cost assignments required.

Direct material costs are recorded:

Directly to a Goods in Process account.

Refer to the data above. How much overhead cost will be assigned to each unit of product using activity-based costing (ABC)?

Dog food: $8.60; cat food: $0.33.

Refer to the data in the preceding tables. How much overhead cost will be assigned to each product line using activity-based costing (ABC)?

Dog food: $860,000; cat food: $65,000.

Which of the following characteristics does not usually apply to process manufacturing systems?

Each unit of product is separately identifiable.

An expression of the activity of a process as the number of units that would have been processed during a period if all effort had been applied to units that were started and finished during the period is called:

Equivalent units of production.

Which of the following characteristics applies to process cost accounting and not to job order cost accounting?

Equivalent units of production.

A line on a scatter diagram that is intended to reflect the past relation between cost and volume is the:

Estimated line of cost behavior.

The margin of safety is the excess of:

Expected sales over break-even sales.

A company identified the following partial list of activities, costs, and activity drivers expected for the next year:

Extrusion: $88 per batch; handling: $32 per order; packaging: $.03 per unit.

Which of the following pair of journal entries correctly records the current month's activity where the company had $21,030 in total factory labor costs that were paid in cash with $16,200 of this total for direct labor?

Factory Payroll 21,030 Cash 21,030 Goods in Process Inventory 16,200 Factory Overhead 4,830 Factory Payroll 21,030

Which of the following pair of journal entries correctly records the current month's activity where the company had $42,060 in total factory labor costs that were paid in cash with $32,400 of this total for direct labor?

Factory Payroll 42,060 Cash 42,060 Goods in Process Inventory 32,400 Factory Overhead 9,660 Factory Payroll 42,060

A cost that remains the same in total even when volume of activity varies is a:

Fixed cost

Which of the following journal entries correctly records the current month's activity where $60,000 of direct material and $17,000 of indirect materials were used in the production process?

Goods in Process 60,000 Factory Overhead 17,000 Raw Materials Inventory 77,000

Direct labor and indirect labor are recorded, respectively to:

Goods in Process and Factory Overhead

Which of the following statements is true?

Heating and air conditioning the clinic is a facility level activity.

A method that estimates cost behavior by connecting the costs linked to the highest and lowest volume levels on a scatter diagram with a straight line is called the:

High-low method.

A company that applies process costing is most frequently characterized by:

Homogeneous product and high production volume.

A target income refers to:

Income planned for a future period.

Which of the following statements is true with regard to the departmental overhead rate method?

It is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments

A statistical method for deriving an estimated line of cost behavior is the:

Least-squares regression method.

Refer to the data above. What are the overhead rates used to apply material handling (MH) and storage costs (SC) using activity-based costing?

MH $300/batch; SC $.20/lb.

The excess of expected sales over the sales level at the break-even point is known as the:

Margin of safety.

A cost that can be separated into fixed and variable components is called a:

Mixed cost

What are three advantages of activity-based costing over traditional volume-based allocation

More accurate product costing, more effective cost control, and better focus on the relevant factors for decision making.

Mueller Corp. manufactures compact discs that sell for $5. Fixed costs are $28,000 and variable costs are $3.60 per unit. Mueller can buy a newer production machine that will increase fixed costs by $8,000 per year but will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mueller's break-even point in units?

No effect on the break-even point in units.

A product sells for $30 per unit and has variable costs of $18 per unit. The fixed costs are $720,000. If the variable costs per unit were to decrease to $15 per unit and fixed costs increase to $900,000, and the selling price does not change, break-even point in units would

Not change

which of the following five types of products is least likely to be produced in a process manufacturing system?

Oil paintings

Assume that the Hood River Juice Company applies factory overhead to its production departments on the basis of 65% of direct labor costs. Direct labor in the Squeezing Department was $80,000 and direct labor in the Filtering Department was $12,000. The entry to apply overhead to these production departments is:

Work in Process - Squeezing 52,000 Work in Process - Filtering 7,800 Factory Overhead 59,800

A system of accounting in which the costs of each process are accumulated separately and then assigned to the units of product that passed through the process is a:

process cost accounting system

An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a

production department

How much overhead will be assigned to Product B using activity-based costing?

$56,500

Assume Moe's Southwest Grill has a break-even point of 24,000 units. At this point, total sales are $1,800,000 and total variable costs are $1,200,000. Compute total fixed costs at the break-even point.

$ 600,000

A company uses a process cost accounting system and the FIFO inventory valuation method. Its Assembly Department's beginning inventory consisted of 50,000 units, three-fourths complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are one-fourth complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. Goods in Process included direct labor costs of $24,000 and overhead costs of $32,000 for the period. The direct labor cost per equivalent unit is:

$0.160

A company uses a process cost accounting system and the weighted-averaage inventory valuation method. Its Assembly Department's beginning inventory consisted of 50,000 units, three-fourths complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are one- fourth complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. Goods in Process included direct labor costs of $30,000 and overhead costs of $40,000 for the period. The overhead cost per equivalent unit is:

$0.213

The following data relates to Tier One Company's estimated amounts for next year.What is the company's plantwide overhead rate if direct labor hours are the allocation base? (Round to two decimal places.)

$0.26 per DLHE. $0.20 per DLH

Compute Aztec's departmental overhead rate for the baking department based on machine hours.

$0.50 per MH

Compute Aztec's departmental overhead rate for the mixing department based on machine hours.

$0.75 per MH.

Using the high-low method and the Willco data, calculate the variable maintenance cost per machine hour (round to three decimal places).

$0.976/hr.

A company manufactures and sells a product for $91 per unit. The company's fixed costs are $859,716 and its variable costs are $25 per unit. What is the company's break-even point in dollars? (Round all calculations to 2 decimal places.)

$1,177,693.15

A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. What is the break-even point in dollar sales?

$1,200,000

During the current period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete at the beginning of the period and 30,000 were started and completed during the period. Also during the period, 10,000 units were started but brought only to a stage of being three-fifths completed. If the FIFO method is used and $13,000 of overhead was charged to Department A during the period, how much overhead should be allocated to the ending goods in process inventory?

$1,500

During the current period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete at the beginning of the period and 30,000 were started and completed during the period. Also during the period, 10,000 units were started but brought only to a stage of being three-fifths completed. If the weighted- average method is used and $14,000 of overhead was charged to Department A during the period, how much overhead should be allocated to the ending goods in process inventory?

$1,500

Aztec Industries produces bread which goes through two operations, mixing and baking, before it is ready to be packaged. Next year's expected costs and activities are shown below. Compute Aztec's departmental overhead rate for the mixing department based on direct labor hours.

$1.50 per DLH.

Rain Maker Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 350,000 units are expected to be produced taking .80 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

$10.40 per unit

Annual production and sales level of Product A1 is 8,480 units, and the annual production and sales level of Product B2 is 22,310 units. What is the approximate overhead cost per unit of Product A1 under activity-based costing?

$12.00

Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales. What will pretax income equal if sales are $325,000?

$122,500

The Filtering Department started the current month with beginning goods in process inventory of $55,000. During the month, it was assigned the following costs: direct materials, $77,000; direct labor, $44,000; and factory overhead, 20% of direct material cost. Also, inventory with a cost of $66,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Filtering Department is:

$125,400

The Machining Department started the current month with beginning goods in process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Goods in Process Inventory account for the Machining Department is:

$13,000

The following data relates to All-Out Company's estimated amounts for next year.What is the company's plantwide overhead rate if machine hours are the allocation base? (Round to two decimal places.)

$150.00 per MH

The following is an account for a production department, showing its costs for one month: Goods in Process Inventory Balance 5,400 Direct materials 21,600 Direct labor 16,200 Overhead 10,800 Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory?

$2,160

Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product B under activity-based costing?

$2.00

Heritage Industries uses departmental overhead rates and is planning on a $1.60 per direct labor hour overhead rate for the finishing department. Compute the estimated manufacturing overhead cost for the finishing department given the information shown in the table.

$260,000

Heritage Industries uses departmental overhead rates and is planning on a $3.20 per machine hour overhead rate for the finishing department. Compute the estimated manufacturing overhead cost for the finishing department given the information shown in the table.

$260,000

Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product A under activity-based costing?

$3.00

The following data relates to Lead Company's estimated amounts for next year.What is the company's plantwide overhead rate if direct labor hours are the allocation base? (Round to two decimal places)

$3.43 per direct labor hour.

A company has fixed costs of $90,000. Its contribution margin ratio is 30% and the product sells for $75 per unit. What is the company's break-even point in dollar sales?

$300,000

Refer to the data above. How much overhead cost will be assigned to the dessert bar product line using activity-based costing (ABC)?

$313,500

Using the high-low method and the Willco data above, what is the approximate fixed cost component of the monthly maintenance costs?

$32,715

Brown Company's contribution margin ratio is 24%. Total fixed costs are $84,000. What is Brown's break-even point in sales dollars?

$350,000

Use the above data for Wall Nuts, Inc. to compute the total manufacturing cost per unit of oak paneling assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B

$36.00

Refer to the data in the preceding tables. How much overhead cost will be assigned to the ice cream sandwich product line using activity-based costing (ABC)?

$368,000

Thomas Company has total fixed costs of $360,000 and variable costs of $14 per unit. If the unit sales price is reduced from $24 to $20 and advertising is increased by $10,000, sales will increase from 40,000 to 65,000 units.97. What are the contribution margin and net income under the revised conditions?

$390,000 and $20,000 respectively.

Assume that sales are predicted to be $3,750, the expected contribution margin is $1,500, and a net loss of $250 is anticipated. The break-even point in sales dollars is:

$4,375

Use the data for Wall Nuts, Inc. to compute departmental overhead rates based on machine hours in Department A and machine hours in Department B.

$4.50 per MH in Dept A; $7.50 per MH in Dept B.

Thomas Company has total fixed costs of $360,000 and variable costs of $14 per unit. If the unit sales price is reduced from $24 to $20 and advertising is increased by $10,000, sales will increase from 40,000 to 65,000 units. What are the contribution margin and net income under the current conditions?

$400,000 and $40,000 respectively.

A company identified the following partial list of activities, costs, and activity drivers expected for the next year: How much overhead in total will be assigned to the Product A line using activity based costing?

$42,500.

Ivan Company has a goal of earning $70,000 after-tax income. Ivan would need to pay $20,000 of income taxes at the target level of income. The contribution margin ratio is 30%. What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?

$420,000

Ridley Company estimates that overhead costs for the next year will be $6,870,000 for indirect labor and $450,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 160,000 machine hours are planned for this next year, what is the company's plantwide overhead rate?

$45.75 per machine hour.

K Company estimates that overhead costs for the next year will be $2,900,000 for indirectlabor and $800,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 80,000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate?

$46.25 per direct labor hour.

Compute Aztec's departmental overhead rate for the baking department based on direct labor hours

$5.00 per DLH

Crinkle Cut Clothes Company manufactures two products CC1 and CC2. Current direct material and direct labor costs are detailed below. Next year the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next year's overhead is estimated to be $338,250. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs $28 per hour and the company expects to manufacture 22,000 units of CC1 and 91,000 units of CC2 next year. Compute the plantwide overhead rate for next year

$5.00 per DLH.

Ginger Company's product has a contribution margin per unit of $11.25 and a contribution margin ratio of 22.5%. What is the selling price of the product?

$50

A firm sells two products, A and B. For every unit of A the firm sells, two units of B are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow: The contribution margin per composite unit is:

$52

A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 complete with respect to direct labor and overhead). The Sewing Department started and finished 120,000 units this period. Its ending inventory consists of 40,000 units (1/4 complete with respect to direct labor and overhead). All direct materials are added at the beginning of the process. Under FIFO what are the equivalent units of production for the Sewing Department for direct materials and for direct labor and overhead, respectively?

160,000; 167,500

A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and its variable costs are $90 per unit. The company's break-even point in units is:

2,292/$275,040

Yellow Company uses a plantwide overhead rate with machine hours as the allocation base. Use the following information to solve for the amount of machine hours estimated per unit of product RST.

20 MH per unit of RST.

The following data are available for a company's manufacturing activities: Beginning goods in process inventory 5,000 units, 1/4 of the labor added this period Units started and completed 15,000 Ending goods in process inventory 6,000 units, 1/2 of the labor added this period Assume the company uses FIFO inventory. If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?

21,000; 19,250

A company uses a process cost accounting system. Its Sewing Department's beginning inventory consisted of 50,000 units (1/4 complete with respect to direct labor and overhead). The Sewing Department started and finished 120,000 units this period. Its ending inventory consists of 40,000 units (1/4 complete with respect to direct labor and overhead). All direct materials are added at the beginning of the process. Under the weighted-average inventory valuation method, what are the equivalent units of production for the Sewing Department for direct materials and for direct labor and overhead, respectively?

210,000; 180,000

During the past year a company had total fixed costs of $70,000. Its product sold for $9 per unit. Variable costs during this time equaled $5 per unit. Next year the company is anticipating a 4% increase in total fixed costs and a $1 per unit decrease in variable costs but would like to maintain its current selling price per unit. How many units must the company sell next year to earn $1 million? (Round answer to complete units.)

214,560

Hartman Co. has fixed costs of $36,000 and a contribution margin ratio of 24%. If expected sales are $200,000, what is the margin of safety as a percentage of sales?

25%

Case Company allocates $5.00 overhead to each unit produced. The company uses a plantwide overhead rate with machine hours as the allocation base. Given the amounts below, how many machine hours does the company expect in department 2?

25,000 MH

The following data are available for a company's manufacturing activities: Beginning goods in process inventory 5,000 units, 1/4 of the labor added this period Units started and completed 15,000 Ending goods in process inventory 6,000 units, 1/2 of the labor added this period Assume the company uses the weighted-average inventory method. If materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively?

26,000; 23,000

The number of units transferred to finished goods during the year is:

3,000

FIFO equivalent units of production for the year are:

3,240 units

If the weighted-average inventory method were used, the equivalent units for the year would be:

3,320

Kamper Company sells two products Big Z and Little Z. Current direct material and direct labor costs are detailed below. Next year, the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next year's overhead is estimated to be $475,000. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs $20 per hour and the company expects to manufacture 32,000 units of Big Z and 9,000 units of Little Z next year.

30,800 total DLH.

What is the firm's break-even point in units of A and B?

31,000 of A and 62,000 of B

During the past year a company had total fixed costs of $700,000. Its product sold for $93 per unit. Variable costs during this time equaled $45 per unit. Next year the company is anticipating a 10% increase in total fixed costs and a $3 per unit decrease in variable costs but would like to maintain its current selling price per unit. How many units must the company sell next year to earn $1 million? (Round answer to complete units.)

34,706

Lee Company manufactures and sells widgets for $2 per unit. Its variable cost per unit is $1.70. Lee's total fixed costs are $10,500. How many widgets must Lee Company sell to break even

35,000

Baker Company's sales mix is 3 units of A, 2 units of B, and 1 unit of C. Selling prices for each product are $20, $30, and $40, respectively. Variable costs per unit are $12, $18, and $24, respectively. Fixed costs are $320,000. What is the break-even point in composite units?

5,000

At the beginning of the recent period, there were 900 units of product in a department, one- third completed. These units were finished and an additional 5,000 units were started and completed during the period. 800 units were still in process at the end of the period, one-fourth completed. Using the FIFO valuation method, the equivalent units produced by the department were:

5,800

A product sells for $210 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 after tax income (assume a 30% tax rate), how many units must be sold?

5,875

During a period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete with respect to direct labor at the beginning of the period and 30,000 were started and completed during the period. Also, during the period, 10,000 units were started but brought only to a stage of being htree-fifths completed. Using the FIFO inventory valuation method, the number of equivalent units produced by Department A during the period was:

52,000

During a period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were one-fifth complete with respect to direct labor at the beginning of the period and 30,000 were started and completed during the period. Also, during the period, 10,000 units were started but brought only to a stage of being three-fifths completed. Using the weighted-average inventory valuation method, the number of equivalent units of labor added by the end of the period was:

56,000

At the beginning of the recent period, there were 900 units of product in a department, one- third completed. These units were finished and an additional 5,000 units were started and completed during the period. 800 units were still in process at the end of the period, one-fourth completed. Using the weighted-average valuation method, the equivalent units produced by the department were:

6,100

A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold

6,500

Greene Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2.

6.2 DLH per unit of G2.

A department had 12,500 units that were 20% complete in beginning Goods in Process Inventory. During the current period 60,000 units were transferred in. Ending Goods in Process Inventory was 15,000 units that were 70% complete. Assume this company uses that weighted-average method of process costing and direct material is added uniformly throughout the process. What are the equivalent units produced with respect to direct material?

68,000

A department had 600 units which were 40% complete in beginning Goods in Process Inventory. During the current period, 7,000 units were transferred out. Ending Goods in Process Inventory was 800 units which were 40% complete. Using the FIFO method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?

7,080

A department had 600 units which were 40% complete in the beginning Goods in Process Inventory. During the current period, 7,000 units were transferred out. Ending Goods in Process Inventory was 800 units which were 40% complete. Using the weighted-average method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?

7,320

A department had 65 units which were 20% complete in beginning Goods in Process Inventory. During the current period, 77 units were transferred out. Ending Goods in Process Inventory was 30 units which were 20% complete. Using the FIFO method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?

70

Orange Company uses a plantwide overhead rate with machine hours as the allocation base. Use the following information to solve for the amount of machine hours estimated per unit of product Q.

70 MH per unit of Q.

A department had 65 units which were 20% complete in the beginning of Goods in Process Inventory. During the current period, 77 units were transferred out. Ending Goods in Process Inventory was 30 units which were 20% complete. Using the weighted-average method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?

83

A company's beginning work in process inventory consisted of 20,000 units that were one- fifth complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were one-third complete at the end of the period. Using FIFO, the equivalent units of production were:

89,000

A company allocates $7.50 overhead to each unit produced. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2?

9,914 DLH

A company's beginning work in process inventory consisted of 20,000 units that were 1/5 complete with respect to direct labor. These beginning units were completed and another 90,000 units were started during the current period. Of those started, 60,000 were finished and the remaining 30,000 were one-third complete at the end of the period. Using the weighted-average method, the equivalent units of production were:

90,000

Baker Company's sales mix is 3 units of A, 2 units of B, and 1 unit of C. Selling prices for each product are $20, $30, and $40, respectively. Variable costs per unit are $12, $18, and $24, respectively. Fixed costs are $320,000. What is the break-even point in units of A, B, and C?

A 15,000; B 10,000; C 5,000.

Which of the following companies would be best served by a plantwide overhead rate?

A company that manufactures few products and whose operations are labor intensive.

A hybrid costing system would be most appropriate when

A manufacturer is able to standardize processes while at the same time attempting to cater to individual customer needs.

The least-squares regression method is:

A statistical method to identify cost behavior.