Mang. Accounting

Manufacturing overhead includes

all manufacturing costs except direct labor and direct materials

If the contribution margin is not sufficient to cover fixed expenses: A) total profit equals total expenses. B) contribution margin is negative. C) a loss occurs. D) variable expenses equal contribution margin.

a loss occurs

Syntronix Sales, Incorporated, a merchandising company, reported sales of 7,100 units in September at a selling price of $682 per unit. Cost of goods sold, which is a variable cost, was $317 per unit. Variable selling expenses were $44 per unit and variable administrative expenses were $22 per unit. The total fixed selling expenses were $157,200 and the total administrative expenses were $338,000.The contribution margin for September was

$2,122,900

Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable expenses are 65% of sales and fixed expenses total $9,800, the break-even point is: (Round your intermediate calculations to 2 decimal places.) A) $15,077 B) $18,200 C) $9,800 D) $28,000

$28,000 Explanation: a)Profit volume Ratio =Sales - Variable / sales * 100 = $28 - $18 / $28 *100 =$10 / $28 *100 =35% Variable cost Calculation: = $28 * 65% =$18 b) BEP= Fixed Cost / PV ratio =$9,800 *100/35 =$28,000

The February contribution format income statement of Mcabier Corporation appears below: Sales Variable expenses Contribution margin Fixed expenses Net operating income The degree of operating leverage is closest to: A) 0.27 B) 6.79 C) 3.70 D) 0.15

$3.70 Contribution Margin/Net Operating Income

Data concerning Buchenau Corporation's single product appear below: Selling price per unit Variable expense per unit Fixed expense per month $150.00 $34.50 $466,620 The break-even in monthly unit sales is closest to: (Round your intermediate calculations to 2 decimal places.)

$4,040

The following cost data pertain to the operations of Jannick Department Stores, Incorporated, for the month of September. Corporate headquarters building lease $ 77,000 Cosmetics Department sales commissions-Northridge Store $ 4,000 Corporate legal office salaries $ 59,000 Store manager's salary-Northridge Store $11,000 Heating-Northridge Store $ 10,000 Cosmetics Department cost of sales-Northridge Store $ 37,000 Central warehouse lease cost $ 16,000 Store security-Northridge Store $ 12,000 Cosmetics Department manager's salary-Northridge Store $ 4,000 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? A) $78,000 B) $45,000 C) $41,000 D) $37,000

$45,000

Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $492,000 and 30,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.) A) $464,120 B) $492,000 C) $487,703 D) $25,000

$464,120 Estimated total manufacturing overhead = $492,000 Estimated Activity level = 30,000 machine hours Predetermined overhead rate = $492,000 / 30000 machine hours Predetermined overhead rate = $16.4 / M-hr Activity actual level = 28,300 Machine hours Manufacturing overhead applied = 28,300 machine hours * $16.40 / M-hr Manufacturing overhead applied = $464,120 The amount of manufacturing overhead applied to all jobs during the period is closest to $464,120

Caneer Corporation produces and sells a single product. Data concerning that product appear below: Selling price per unit Variable expense per unit Fixed expense per month $240.00 $81.60 $997,920 The unit sales to attain the company's monthly target profit of $44,000 is closest to: (Round your intermediate calculations to 2 decimal places.) A) 7,896 B) 12,769 C) 6,578 D) 4,341

$6,578

Holts Corporation has two divisions: Xi and Sigma. Data from the most recent month appear below: The company's common fixed expenses total $78,840. The break-even in sales dollars for the company as a whole is closest to Sales Variable expenses Traceable fixed expenses A) $487,491 B) $606,715 C) $466,018 D) $119,225 Xi $311,000 $ 65,310 $176,000 Sigma $346,000 $169,540 $135,000

$606,715

Zippy Company reports that at an activity level of 2,100 machine-hours in a month, its total variable inspection cost is $69,846 and its total fixed inspection cost is $9,072.What would be the total variable inspection cost at an activity level of 2,400 machine-hours in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.) A) $78,918 B) $69,846 C) $79,824 D) $10,368

$79,824

The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Department A and on machine-hours in Department B. At the beginning of the year, the Corporation made the following estimates: Department A Department B Direct labor cost $ 60,000 $ 40,000 Manufacturing overhead $ 90,000 $ 45,000 Direct labor-hours 6,000 9,000 Machine-hours 2,000 15,000 What predetermined overhead rates would be used in Department A and Department B, respectively? A) 67% and $3.00 B) 150% and $5.00 C) 150% and $3.00 D) 67% and $5.0

150% AND $3.00 dep A = manufacturing overhead * 100 / direct labour cost = 90000 * 100 / 60000 = 150 % dep B = manufacturing overhead / machine hour = 45000 / 15000 = 3 per machine hences = 150 % and 3.00

Hopi Corporation expects the following operating results for next year: Sales $400,000 Margin of safety $100,000 Contribution margin ratio 75% Degree of operating leverage 4 What is Hopi expecting total fixed expenses to be next year? A) $75,000 B) $100,000 C) $200,000 D) $225,00

200,000

Ouelette Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $5.25 Direct labor $4.05 Variable manufacturing overhead $1.30 Fixed manufacturing overhead $3.00 Fixed selling expense $0.70 Fixed administrative expense $0.40 Sales commissions $0.50 Variable administrative expense $0.45 If 6,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to: A) $15,000 B) $22,800 C) $7,800 D) $25,800

22,800

The following information pertains to Nova Co.'s cost-volume-profit relationships: Breakeven point in units sold Variable expenses per unit Total fixed expenses 1,000 $500 $150,000 How much will be contributed to net operating income by the 1,001st unit sold? A) $650 B) $500 C) $150 D) $0

Break EVEN IN Units = Fixed Cost / Contribution per Unit 1000 = 150000/ Contribution per unit By Solving above, we get Contribution per Unit = 150

Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs: A) started in process during the period. B) in process during the period. C) completed and sold during the period. D) completed during the period.

Completed during the period

Majid Corporation sells a product for $240 per unit. The product's current sales are 41,300 units and its break-even sales are 36,757 units. What is the margin of safety in dollars? A) $8,821,680 B) $6,608,000 C) $9,912,000 D) $1,090,320

Computation of margin of safety: Margin of safety in units = sale unit - break even sales unit = 41,300 units - 36,757 units = 4,543 units Margin of safety in dollars= margin of safety in units * sailing price = 4,543 units * $240 = $1,090,320

In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to which of the following equations?

Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory − Ending work in process inventory

Mahon Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Customizing Machine-hours 18,000 14,000 Direct labor-hours 2,000 7,000 Total fixed manufacturing overhead cost $124,200 $68,600 Variable manufacturing overhead per machine hour $ 1.90 Variable manufacturing overhead per direct labor-hour $ 3.80 During the current month the company started and finished Job T138. The following data were recorded for this job: Job T138: Casting Customizing Machine-hours 70 30 Direct labor-hours 10 60 The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.)

Department's predetermined overhead rate 68,600/ 7,0009.8 Overhead applied to job 3.8 * 60228 Variable manufacturing OH applied 9.8 * 60588 Fixed manufacturing OH applied 228 + 588816 The amount of overhead applied = 816

Which of the following is NOT a period cost?1.)Depreciation of factory maintenance equipment2.)Salary of a clerk who handles customer billing3.)Insurance on a company showroom where customers can view new products4.)Cost of a seminar concerning tax law updates that was attended by the company's controller

Depreciation of factory maintenance equipment

Which of the following costs is classified as both a prime cost and a conversion cost? A) Direct materials. B) Direct labor. C) Variable overhead. D) Fixed overhead

Direct Labor

Carradine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $105,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. The company recently completed Job P233 which required 60 machine-hours. The amount of overhead applied to Job P233 is closest to: (Round your intermediate calculations to 2 decimal places. A) $90 B) $270 C) $450 D) $180

Fixed manufacturing overhead rate = 105000/70000 = 1.5 per machine hour variable manufacturing overhead rate = 3 per machine hour Total manufacturing overhead rate = (3+1.5) = 4.5 per machine hour Amount of overhead applied to job P233 is closest = (60*4.5) = 270 so answer is $270

For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable. This cost per unit increase may be due to _____________ costs if the level of activity at Jinan is _______________.

Fixed,Decreasing

When closing over applied manufacturing overhead to Cost of Goods Sold, which of the following would be true?

Gross margin will increase

Mossfeet Shoe Corporation is a single product firm. The company is predicting that a price increase next year will not cause unit sales to decrease. What effect would this price increase have on the following items for next year? A) B) C) D) Contribution Margin Ratio Increase Decrease Increase Decrease Break-even Point Decrease Decrease No effect No effect

Increase, decrease

In a job-order costing system, indirect labor cost is usually recorded as a debit to: A) Manufacturing Overhead. B) Finished Goods. C) Work in Process. D) Cost of Goods Sold.

Manufacturing Overhead.

The following data have been collected for four different cost items. Cost Item Cost at 100 units Cost at 140 units: W $8,000 /// $10,560 X $5,000 /// $ 5,000 Y $6,500 /// $9,100 Z $6,700 /// $ 8,580 Which of the following classifications of these cost items by cost behavior is correct?

Mixed, Fixed, Variable, Mixed W: 8000/ 100= 8080* 140= 11,200 MC X: FCY:6500/100=6565*140= 9100 VC Y: 6500/100=6565*140= 9100 VC Z: 6700/100= 6767* 140= 9380 MC

If the degree of operating leverage is 4, then a one percent change in quantity sold should result in a four percent change in: A) unit contribution margin. B) revenue. C) variable expense. D) net operating income.

Net operating income

Refer to the T-account below: Manufacturing Overhead Debit Credit (2) 9,000 (12) 167,000 (3) 15,000 (4) 80,000 (5) 30,000 (6) 25,000 159,000 167,000 Balance 8,000 The ending balance of $8,000 represents which of the following

Overapplied overhead

Refer to the T-account below Manufacturing Overhead Debit Credit (2) 4,000 (9) 150,000 (3) 15,000 (4) 80,000 (5) 30,000 (6) 25,000 154,000 150,000 Entry (4) could represent which of the following except?

Overhead cost applied to Work in Process.

Which of the following is the correct formula to compute the predetermined overhead rate?

Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base

Data concerning Follick Corporation's single product appear below: Selling price per unit Variable expense per unit Fixed expense per month $110.00 $30.80 $321,552 The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

Revenue = Selling price per unit*Q Cost = Variable price per unit * Q + Fixed expense Profit = Revenue - Cost Profit = 110*Q - 30.80*Q - 321552 At break even point profit = 0 Solving for Q we get Q = 321552/(79.20) Q = 4060 Monthly dollar sale = 4060*110 = $446600

Duve Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (2,000 units) Variable expenses Contribution margin Fixed expenses Net operating income $40,000 24,000 16,000 11,200 $4,800 If the selling price increases by $4 per unit and the sales volume decreases by 200 units, the net operating income would be closest to: A) $7,200 B) $12,800 C) $10,400 D) $11,520

SP/unit=(40000/2000)=$20 Sales(20+4)*(2000-200)) - 43200 Variable expenses (24000/2000)*1800 units - 21600 Contribution margin - 21600 Fixed expenses - 11200 =Net operating income $10,400

Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement for November. Sales (5,700 units) Variable expenses Contribution margin Fixed expenses Net operating income If the company sells 5,300 units, its net operating income should be closest to: A) $24,600 B) $2,200 C) $22,874 D) $15,400

Sales price per Unit= 319200/5700 Sales price per unit= $56 per unit Variable expense per unit= 188100/5700= $33 per unit Contribution Margin= Sales price per unit- Variable expense per unit = $56-$33 =$23 per unit Hence for 5300 units contribution margin= $23*5300 units =$121,900 Fixed expense will remain same $106,500 Hence Net operating income= $121900-106500 =$15,400

Logsdon Corporation produces and sells a single product whose contribution margin ratio is 63%. The company's monthly fixed expense is $720,720 and the company's monthly target profit is $28,000. The dollar sales to attain that target profit is closest to: A) $471,694 B) $454,054 C) $1,188,444 D) $1,144,000

Sales value for target profit = (Fixed cost + Desired profit) / Contribution margin ratio = (720720 + 28000) / 63% =748720/63% =1188444 The dollar sale to attain that target profit is =$1188444.

All of the following can be differential costs except: A) variable costs. B) sunk costs. C) opportunity costs. D) fixed costs.

Sunk Cost

Number of units produced each year Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense The absorption costing unit product cost is: A) $149 per unit B) $65 per unit C) $63 per unit D) $128 per unit

The absorption costing unit product cost = Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead = $51 + $12 + $2 + $63 ($441,000 / 7,000) = $128 per unit

Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total $319,200 188,100 131,100 106,500 $24,600 Sales Variable expenses Contribution margin Fixed expenses Net operating income $400,000 280,000 120,000 100,000 $20,000 What is total contribution margin if sales volume increases by 20%? A) $80,000 B) $158,400 C) $200,000 D) $144,000

Total contribution margin if sale volume increase by 20%total contribution margin = (120000*1.20) = 144000

Sutter Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 10,000 Total fixed manufacturing overhead cost $35,000 Variable manufacturing overhead per machine-hour $ 2.20 Recently, Job T369 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 40 Direct materials $ 750 Direct labor cost $1,560 If the company marks up its unit product costs by 20% then the selling price for a unit in Job T369 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $324.56 B) $304.56 C) $277.20 D) $50.76

Total variable overhead estimated=(10,000*2.2)=$22000 Total overhead estimated=Total variable overhead estimated+Total fixed overhead estimated =35000+22000 =$57000 Predetermined overhead rate=Total overhead estimated/Estimated machine hours =57000/10,000 =$5.7 per machine hour Total overhead would be=Predetermined overhead rate*Actual machine hours =(5.7*40)=$228 Add:Direct materials=$750 Add:Direct labor=$1560 Total cost=$2538 Hence cost per unit=(2538/10) =$253.8 per unit Hence selling price=cost per unit*120% =253.8*120% = $304.56 per unit

Dietrick Corporation produces and sells two products. Data concerning those products for the most recent month appear below: Sales Variable expenses Product B32L $ 46,000 $ 13,800 Product K84B $ 27,000 $ 14,670 Fixed expenses for the entire company were $42,550.If the sales mix were to shift toward Product B32L with total sales remaining constant, the overall break-even point for the entire company: A) could increase or decrease. B) would decrease. C) would not change. D) would increase.

Would increase

During June, Buttrey Corporation incurred $72,000 of direct labor costs and $12,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: A) debit to Work in Process of $72,000. B) credit to Work in Process of $84,000. C) debit to Work in Process of $84,000. D) credit to Work in Process of $72,000

debit to Work in Process of $72,000.

Which of the following costs at a manufacturing company would be treated as a product cost under variable costing? A) direct material cost B) property taxes on the factory building C) sales manager's salary D) sales commissions

direct material cost

The costing method that treats all fixed costs as period costs is: A) absorption costing. B) job-order costing. C) variable costing. D) process costing.

variable costing

A factory supervisor's wages are classified as: Indirect labor Fixed manufacturing overhead A) No No B) Yes Yes C) Yes No D) No Yes

yes,yes