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Exam 1: Managerial Accounting and Cost Concepts

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Question 111

True/False

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A decrease in production will ordinarily result in a decrease in fixed production costs per unit.

A) True
B) False

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Question 112

Multiple Choice

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The contribution margin for the University Store for the first quarter is:

A) $660,000
B) $700,000
C) $180,000
D) $140,000

E) A) and D)
F) A) and C)

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Question 113

Multiple Choice

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Within the relevant range, variable costs can be expected to:

What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?

Manufacturing overhead includes:

Classify the following costs for an auto manufacturer as either direct materials, direct labor, manufacturing overhead, or period costs. Required: Complete the answer sheet above by placing an "X" under each heading that identifies the cost involved.

The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:

The costs of direct materials are classified as:

Dizzy employees a certified operator for each of its 35 rides.Each operator is paid $20 per hour.The cost of the certified operators would best be described as a:

A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product.

If managers are reluctant to lay off direct labor employees when activity declines leads to a decrease in the ratio of variable to fixed costs.

Tirri Corporation has provided the following information: If the selling price is $26.20 per unit, the contribution margin per unit sold is closest to:

What would be the total variable cost at an activity level of 5,200 units? Assume that this level of activity is within the relevant range.

A cost incurred in the past that is not relevant to any current decision is classified as a(n) :

If 4,000 units are sold, the total variable cost is closest to:

If 5,000 units are produced, the total amount of manufacturing overhead cost is closest to:

A cost that differs from one month to another is known as a sunk cost.

Myklebust Corporation's relevant range of activity is 4,000 units to 8,000 units.When it produces and sells 6,000 units, its average costs per unit are as follows: 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 $20.20 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 cost incurred? f.What incremental manufacturing cost will the company incur if it increases production from 6,000 to 6,001 units?

To the nearest whole dollar, what should be the total sales commissions at a sales volume of 18,400 units? (Assume that this sales volume is within the relevant range.)

As the level of activity increases, how will a mixed cost in total and per unit behave?