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Exam 1: Managerial Accounting and Cost Concepts

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Question 21

True/False

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In a traditional format income statement for a merchandising company, cost of goods sold is a variable cost that is included in the "Variable expenses" portion of the income statement.

A) True
B) False

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Question 22

Multiple Choice

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The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to:

A) $10.65
B) $13.45
C) $16.25
D) $13.95

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

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Question 23

Multiple Choice

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If 5,000 units are sold, the variable cost per unit sold is closest to:

If 20,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:

In a contribution format income statement for a merchandising company, the cost of goods sold reports the product costs attached to the merchandise sold during the period.

In the standard cost formula Y = a + bX, what does the "X" represent?

Which of the following approaches to preparing an income statement includes a calculation of the gross margin?

What would be the total variable maintenance cost at an activity level of 9,300 machine-hours in a month? Assume that this level of activity is within the relevant range.

For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to:

Opportunity costs at a manufacturing company are not part of manufacturing overhead.

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

Wages paid to production supervisors would be classified as manufacturing overhead.

The salary that Mark earns at his present employ is:

If 6,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Perkey Corporation has provided the following information: If 4,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

A number of costs are listed below. Required: For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it.

What would be the average fixed inspection cost per unit at an activity level of 2,400 machine-hours in a month? Assume that this level of activity is within the relevant range.

The following costs were incurred in May: Conversion costs during the month totaled:

The fixed portion of the cost of electricity for a manufacturing facility is classified as a:

Asplund Corporation has provided the following information: Required: a.For financial reporting purposes, what is the total amount of product costs incurred to make 5,000 units? b.For financial reporting purposes, what is the total amount of period costs incurred to sell 5,000 units?