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Exam 1: Managerial Accounting and Cost Concepts

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Question 21

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A cost can be direct or indirect. The classification can change if the cost object changes.

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Question 22

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Kogler 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: The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to:

A) $10.60
B) $22.75
C) $19.60
D) $25.50

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Question 23

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Contribution margin is:

Prime cost is the sum of direct materials cost and direct labor cost.

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 total amount of fixed manufacturing cost incurred is closest to:

Lambeth Corporation has provided the following information: If 3,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

Morrisroe Corporation has provided the following information: Required: a. If the selling price is $25.90 per unit, what is the contribution margin per unit sold? b. What incremental manufacturing cost will the company incur if it increases production from 5,000 to 5,001 units?

Selling and administrative expenses are period costs under generally accepted accounting principles.

Product costs that have become expenses can be found in:

Management of Mcgibboney Corporation has asked your help as an intern in preparing some key reports for November. Direct materials cost was $42,000, direct labor cost was $25,000, and manufacturing overhead was $62,000. Selling expense was $21,000 and administrative expense was $38,000. The conversion cost for November was:

Wippert Corporation, a merchandising company, reported the following results for December: Required: a. Prepare a traditional format income statement for December. b. Prepare a contribution format income statement for December.

Oerther Corporation reports that at an activity level of 5,000 units, its total variable cost is $131,750 and its total fixed cost is $31,200. What would be the average fixed cost per unit at an activity level of 5,200 units? Assume that this level of activity is within the relevant range.

Schwiesow Corporation has provided the following information: For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to:

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?

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

Waldhauser Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: If 6,000 units are sold, the total variable cost is closest to:

Brault Corporation has provided the following information: If 10,000 units are sold, the variable cost per unit sold is closest to:

Erkkila Inc. reports that at an activity level of 2,100 machine-hours in a month, its total variable inspection cost is $69,846 and its total fixed inspection cost is $9,072. 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.

Pedregon Corporation has provided the following information: If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to:

Streif Inc., a local retailer, has provided the following data for the month of June: The net operating income for June was: