Question 1

For an automobile manufacturer, the cost of a driver's side air bag purchased from a supplier and installed in every automobile would best be described as a:

Accepted Answer

A)  fixed cost.
B)  mixed cost.
C)  step-variable cost.
D)  variable cost.

Question 2

If the selling price is $21.90 per unit, the contribution margin per unit sold is closest to:

Accepted Answer

A)  $9.35
B)  $12.60
C)  $8.45
D)  $5.65

Question 3

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Accepted Answer

A)  $14,600
B)  $17,600
C)  $11,600
D)  $23,600

Question 4

If 8,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Accepted Answer

A)  $14,000
B)  $93,200
C)  $89,100
D)  $103,100

Question 5

Given the cost formula, Y = $16,000 + $3.40X, total cost for an activity level of 4,000 units would be:

Accepted Answer

A)  $13,600
B)  $3,600
C)  $29,600
D)  $16,000

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers.Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle?

Accepted Answer

The answer of Rotonga Manufacturing Company leases a vehicle to...

Question 8

The contribution margin for October is:

Accepted Answer

A)  $1,424,500
B)  $3,191,400
C)  $1,901,900
D)  $996,900

Question 9

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.

Accepted Answer

a.Traditional Format...

Question 10

Which of the following statements is true when referring to fixed costs?

Accepted Answer

A)  Committed fixed costs arise from the annual decisions by management.
B)  As volume increases, unit fixed cost and total fixed cost will change.
C)  Fixed costs increase in total throughout the relevant range.
D)  Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company.

Question 11

Direct labor cost is classified as:

Accepted Answer

The answer of Direct labor cost is classified as: ...

Question 12

In May direct labor was 60% of conversion cost.If the manufacturing overhead for the month was $54,000 and the direct materials cost was $30,000, the direct labor cost was:

Accepted Answer

A)  $36,000
B)  $20,000
C)  $81,000
D)  $45,000

Question 13

The contribution format income statement is used as an internal planning and decision-making tool.Its emphasis on cost behavior aids cost-volume-profit analysis, management performance appraisals, and budgeting.

Accepted Answer

A) True 
 B)False

Question 14

When the level of activity decreases within the relevant range, the fixed cost per unit will:

Accepted Answer

A)  decrease.
B)  increase.
C)  remain the same.
D)  The effect cannot be predicted.

Question 15

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Accepted Answer

A)  $16,300
B)  $25,600
C)  $19,400
D)  $13,200

Question 16

Which of the following is an example of a period cost in a company that makes clothing?

Accepted Answer

A)  Fabric used to produce men's pants.
B)  Advertising cost for a new line of clothing.
C)  Factory supervisor's salary.
D)  Monthly depreciation on production equipment.

Question 17

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

Accepted Answer

A)  $17.15
B)  $11.00
C)  $14.00
D)  $12.50

Question 18

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 19

If the selling price is $25.00 per unit, the contribution margin per unit sold is closest to:

Accepted Answer

A)  $13.45
B)  ($0.50) 
C)  $5.40
D)  $15.95

Question 20

The cost of goods sold for June was:

Accepted Answer

A)  $128,000
B)  $181,000
C)  $122,000
D)  $134,000

Exam 1: Managerial Accounting and Cost Concepts

When the level of activity decreases within the relevant range, the fixed cost per unit will:

Correct AnswerverifiedShow Answer

Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers.Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle?

Correct AnswerverifiedShow Answer

The contribution format income statement is used as an internal planning and decision-making tool.Its emphasis on cost behavior aids cost-volume-profit analysis, management performance appraisals, and budgeting.

Correct AnswerverifiedShow Answer

In May direct labor was 60% of conversion cost.If the manufacturing overhead for the month was $54,000 and the direct materials cost was $30,000, the direct labor cost was:

Correct AnswerverifiedShow Answer

If 8,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Correct AnswerverifiedShow Answer

The cost of goods sold for June was:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Direct labor cost is classified as:

Correct AnswerverifiedShow Answer

If the selling price is $21.90 per unit, the contribution margin per unit sold is closest to:

Correct AnswerverifiedShow Answer

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the selling price is $25.00 per unit, the contribution margin per unit sold is closest to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct Answerverifieda.Traditional Format...View AnswerShow Answer

For an automobile manufacturer, the cost of a driver's side air bag purchased from a supplier and installed in every automobile would best be described as a:

Correct AnswerverifiedShow Answer

Given the cost formula, Y = $16,000 + $3.40X, total cost for an activity level of 4,000 units would be:

Correct AnswerverifiedShow Answer

Which of the following statements is true when referring to fixed costs?

Correct AnswerverifiedShow Answer

The contribution margin for October is:

Correct AnswerverifiedShow Answer

Which of the following is an example of a period cost in a company that makes clothing?

Correct AnswerverifiedShow Answer

If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Correct AnswerverifiedShow Answer

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a.Traditional Format...
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