Unit 6: Managerial Accounting

1 / 1 These data are for Ren Miller Company. Total sales revenue$250,000Number of units sold$100,000Variable costs$100,000Fixed costs$50,000 Calculate the total contribution margin.

$150,000 Correct! Contribution margin = total sales revenue less variable costs = $250,000 - $100,000 = $150,000.

1 / 1 Garcia Company reported the following data. Price per unit = $10 Variable cost per unit = $7 Fixed cost = $1,500 Number of units sold = 700 units Given these data, compute the contribution margin per unit.

$3 per unit Correct! Contribution margin = price per unit of $10 less the variable cost per unit of $7 = $3 contribution margin per unit.

Michael Company reported the following data. Price per unit = $10 Variable cost per unit = $7 Fixed cost = $3,300 Given these data, compute the break-even number of units.

1,100 units Correct! $3,300 fixed cost / ($10 selling price per unit -$7 variable cost per unit) = 1,100 units

Turay Company reported the following data. Price per unit = $20 Fixed cost = $6,000 Break-even number of units = 1,000 units Given these data, compute the variable cost per unit.

Designate VC as the variable cost per unit $6,000 fixed cost / ($20 selling price per unit - VC) = 1,000 break-even number of units VC = $20 selling price per unit - ($6,000 fixed cost / 1,000 break-even number of units) VC = $14 per unit

What are the three categories of manufacturing costs?

Direct materials, direct labor, and manufacturing overhead ,

9 1 / 1 These data are for Charlotte Martin Company. Sales revenue$500,000Variable costs$420,000Break-even number of units100,000 Calculate the total fixed costs when Charlotte Martin sells 100,000 units.

Let X = fixed costs. Sales Revenue - Variable Costs − Fixed Costs = $0 $500,000 − $420,000 - X = $0 $500,000 − $420,000 = X $80,000 = X

Which statement accurately describes managerial and financial accounting data?

Managerial accounting data are created based on competitive needs that are unique to the organization.

What is a mixed cost?

Mixed cost is a cost that includes both a fixed portion and variable portion.

What are sunk costs?

Past costs that cannot be changed

What problem will be caused if overhead is underapplied?

Total cost of products or orders will be understated.

hat is a stepped fixed cost?

a stepped fix cost is a cost that remains the same./ A cost that remains constant in total within a range of activity and then changes in a large amount above a certain threshold of activity

Which statement describes managerial accounting?

compares planned and actual results

1 / 1 What is an opportunity cost?

revenue lost from selecting a different alternative

How is contribution margin calculated?

sales - variable cost

Which statement is correct with respect to accounting for overhead?

the overhead amount is temporary holding account for overhead cost