Question 1

Weingartner Corporation,a merchandising company,reported sales of 4,800 units for July at a selling price of $269 per unit.The cost of goods sold (all variable)was $114 per unit and the variable selling expense was $6 per unit.The total fixed selling expense was $38,100.The variable administrative expense was $14 per unit and the total fixed administrative expense was $59,900.
Required:
a.Prepare a contribution format income statement for July.
b.Prepare a traditional format income statement for July.

Accepted Answer

The answer of Weingartner Corporation,a merchandising company,reported sales of 4,800...

Question 2

Learned Corporation has provided the following information:
  Required:
a.For financial reporting purposes,what is the total amount of product costs incurred to make 6,000 units?
b.For financial reporting purposes,what is the total amount of period costs incurred to sell 6,000 units?
c.If the selling price is $22.40 per unit,what is the contribution margin per unit sold?
d.If 7,000 units are produced,what is the total amount of direct manufacturing cost incurred?
e.If 7,000 units are produced,what is the total amount of indirect manufacturing costs incurred?

Accepted Answer

The answer of Learned Corporation has provided the following information:
...

Question 3

Which of the following statements is correct in describing manufacturing overhead?

Accepted Answer

A)  Manufacturing overhead when combined with direct materials cost forms conversion cost. 
B)  Manufacturing overhead consists of all manufacturing cost except for prime cost. 
C)  Manufacturing overhead is a period cost. 
D)  Manufacturing overhead when combined with direct labor cost forms prime cost.

Question 4

Schwiesow Corporation has provided the following information:
 
-If 6,000 units are produced,the total amount of indirect manufacturing cost incurred is closest to:

Accepted Answer

A)  $23,100 
B)  $9,900 
C)  $11,000 
D)  $20,900

Question 5

The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n):

Accepted Answer

A)  period cost. 
B)  direct material cost. 
C)  indirect material cost. 
D)  opportunity cost.

Question 6

The following cost data pertain to the operations of Ladwig Department Stores, Inc., for the month of December.
  The Brentwood Store is just one of many stores owned and operated by the company. The Shoe Department is one of many departments at the Brentwood 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 Brentwood Store?

Accepted Answer

A)  $74,000 
B)  $32,000 
C)  $157,000 
D)  $86,000

Question 7

A step-variable cost is a cost that is obtained in large chunks and that increases or decreases only in response to fairly wide changes in activity.

Accepted Answer

A) True 
 B)False

Question 8

Timchak Corporation reports that at an activity level of 9,900 units,its total variable cost is $919,116 and its total fixed cost is $259,974.What would be the total cost,both fixed and variable,at an activity level of 10,100 units? Assume that this level of activity is within the relevant range.

Accepted Answer

A)  $1,197,658 
B)  $1,191,000 
C)  $1,179,090 
D)  $1,202,910

Question 9

Fasheh 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:
 
-If 10,000 units are produced,the average fixed manufacturing cost per unit produced is closest to:

Accepted Answer

A)  $15.00 
B)  $12.83 
C)  $13.50 
D)  $12.15

Question 10

If Lonnie were to sell 42,000 units,the total expected cost would be:

Accepted Answer

A)  $105,000 
B)  $100,000 
C)  $103,000 
D)  $102,000

Question 11

Adens Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows:
 
-If 5,000 units are sold,the total variable cost is closest to:

Accepted Answer

A)  $53,000 
B)  $65,000 
C)  $60,500 
D)  $77,000

Question 12

Dominik Corporation purchased a machine 5 years ago for $527,000 when it launched product M08Y. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 310 machine costing $545,000 or by a new model 240 machine costing $450,000. Management has decided to buy the model 240 machine. It has less capacity than the model 310 machine, but its capacity is sufficient to continue making product M08Y. Management also considered, but rejected, the alternative of dropping product M08Y and not replacing the old machine. If that were done, the $450,000 invested in the new machine could instead have been invested in a project that would have returned a total of $532,000.
-In making the decision to buy the model 240 machine rather than the model 310 machine,the differential cost was:

Accepted Answer

A)  $95,000 
B)  $5,000 
C)  $77,000 
D)  $18,000

Question 13

The salary paid to the president of a company would be classified on the income statement as a(n):

Accepted Answer

A)  administrative expense. 
B)  direct labor cost. 
C)  manufacturing overhead cost. 
D)  selling expense.

Question 14

Product costs are also known as inventoriable costs.

Accepted Answer

A) True 
 B)False

Question 15

To the nearest whole cent,what should be the average cost of operating the helpline per call at a volume of 25,300 calls in a month? (Assume that this call volume is within the relevant range.)

Accepted Answer

A)  $18.93 
B)  $18.00 
C)  $17.89 
D)  $18.10

Question 16

Which of the following costs could contain both variable and fixed cost elements with respect to the total output of the company?

Accepted Answer

A)  Sales commissions. 
B)  Manufacturing overhead. 
C)  Direct materials. 
D)  Administrative salaries.

Question 17

Selling costs are indirect costs.

Accepted Answer

A) True 
 B)False

Question 18

Although the traditional format income statement is useful for external reporting purposes,it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs.

Accepted Answer

A) True 
 B)False

Question 19

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year:
 
-What is the total of the conversion costs above?

Accepted Answer

A)  $65,000 
B)  $69,000 
C)  $90,000 
D)  $155,000

Question 20

Wessner Corporation has provided the following information:
 
-The incremental manufacturing cost that the company will incur if it increases production from 4,000 to 4,001 units is closest to:

Accepted Answer

A)  $16.00 
B)  $14.05 
C)  $10.45 
D)  $13.45

Exam 1: Managerial Accounting and Cost Concepts

Which of the following statements is correct in describing manufacturing overhead?

Schwiesow Corporation has provided the following information: -If 6,000 units are produced,the total amount of indirect manufacturing cost incurred is closest to:

The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n) :

A step-variable cost is a cost that is obtained in large chunks and that increases or decreases only in response to fairly wide changes in activity.

Timchak Corporation reports that at an activity level of 9,900 units,its total variable cost is $919,116 and its total fixed cost is $259,974.What would be the total cost,both fixed and variable,at an activity level of 10,100 units? Assume that this level of activity is within the relevant range.

Fasheh 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: -If 10,000 units are produced,the average fixed manufacturing cost per unit produced is closest to:

If Lonnie were to sell 42,000 units,the total expected cost would be:

Adens Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: -If 5,000 units are sold,the total variable cost is closest to:

The salary paid to the president of a company would be classified on the income statement as a(n) :

Product costs are also known as inventoriable costs.

To the nearest whole cent,what should be the average cost of operating the helpline per call at a volume of 25,300 calls in a month? (Assume that this call volume is within the relevant range.)

Which of the following costs could contain both variable and fixed cost elements with respect to the total output of the company?

Selling costs are indirect costs.

Although the traditional format income statement is useful for external reporting purposes,it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs.

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year: -What is the total of the conversion costs above?

Wessner Corporation has provided the following information: -The incremental manufacturing cost that the company will incur if it increases production from 4,000 to 4,001 units is closest to: