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Exam 1: Managerial Accounting and Cost Concepts

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Question 51

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The ________________________ is the amount remaining from sales revenue after all variable expenses have been deducted.

A) cost structure
B) gross margin
C) contribution margin
D) committed fixed cost

E) All of the above
F) None of the above

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Question 52

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The following data pertains to activity and maintenance cost for two recent periods: Maintenance cost is a mixed cost with both fixed and variable components.Using the high-low method, the cost formula for maintenance cost is:

A) Y = $8, 000 + $1.75 X
B) Y = $3.75 X
C) Y = $1, 750 + $3.35 X
D) Y = $3.35 X

E) None of the above
F) A) and C)

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Question 53

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A soft drink bottler incurred the following factory utility cost: $3, 936 for 800 cases bottled and $3, 988 for 900 cases bottled.Factory utility cost is a mixed cost containing both fixed and variable components.The variable factory utility cost per case bottled is closest to:

In April direct labor was 70% of conversion cost.If the manufacturing overhead for the month was $42, 000 and the direct materials cost was $28, 000, the direct labor cost was:

Comparative income statements for Tudor Retailing Company for the last two months are presented below: If the Tudor Retailing Company uses the high-low method of analysis, the total monthly fixed cost for Tudor Retailing Company would be estimated to be:

Baker Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total cost to manufacture 6, 300 units is closest to:

Electrical costs at one of Reifel Corporation's factories are listed below: Management believes that electrical cost is a mixed cost that depends on machine-hours. Using the high-low method, the estimate of the fixed component of electrical cost per month is closest to:

Abare Corporation reported the following data for the month of December: The conversion cost for December was:

Management of Lewallen Corporation has asked your help as an intern in preparing some key reports for September.Direct materials cost was $57, 000, direct labor cost was $43, 000, and manufacturing overhead was $71, 000.Selling expense was $15, 000 and administrative expense was $32, 000. The conversion cost for September was:

The following data pertains to activity and utility cost for two recent periods: Utility cost is a mixed cost with both fixed and variable components.Using the high-low method, the cost formula for utility cost is:

Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table?

Stott Company requires one full-time dock hand for every 500 packages loaded daily.The wages for these dock hands would be:

At a sales volume of 35, 000 units, Cly Corporation's sales commissions (a cost that is variable with respect to sales volume) total $525, 000. To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 33, 600 units? (Assume that this sales volume is within the relevant range. )

Corcetti Company manufactures and sells prewashed denim jeans.Large rolls of denim cloth are purchased and are first washed in a giant washing machine.After the cloth is dried, it is cut up into jean pattern shapes and then sewn together.The completed jeans are sold to various retail chains. Which of the following terms could be used to correctly describe the wages paid to the workers that cut up the cloth into the jean pattern shapes?

Contribution margin equals revenue minus all fixed costs.

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: The best estimate of the total monthly fixed manufacturing cost is:

Commissions paid to salespersons are a variable selling expense.

Emerton Corporation leases its corporate headquarters building.This lease cost is fixed with respect to the company's sales volume.In a recent month in which the sales volume was 32, 000 units, the lease cost was $716, 800. To the nearest whole cent, what should be the average lease cost per unit at a sales volume of 34, 400 units in a month? (Assume that this sales volume is within the relevant range. )

Sobota Corporation has provided the following partial listing of costs incurred during August: Required: a.What is the total amount of product cost listed above? Show your work. b.What is the total amount of period cost listed above? Show your work.

Which of the following costs is classified as a prime cost?