Question 1

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

Accepted Answer

A)  $16.20
B)  $10.80
C)  $13.80
D)  $14.30E) A) and C)
F) A) and B)

Question 2

If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:

Accepted Answer

A)  $875,000
B)  $300,000
C)  $175,000
D)  $65,000E) B) and C)
F) A) and D)

Question 3

Gabel Inc.is a merchandising company.Last month the company's merchandise purchases totaled $63,000.The company's beginning merchandise inventory was $13,000 and its ending merchandise inventory was $15,000.What was the company's cost of goods sold for the month?

Accepted Answer

A)  $91,000 
B)  $63,000
C)  $65,000
D)  $61,000E) A) and D)
F) None of the above

Question 4

The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 5

In making the decision to buy the model 240 machine rather than the model 310 machine, the differential cost was:

Accepted Answer

A)  $95,000
B)  $5,000
C)  $77,000
D)  $18,000E) A) and B)
F) None of the above

Question 6

Which of the following is NOT a period cost?

Accepted Answer

A)  Depreciation of factory maintenance equipment.
B)  Salary of a clerk who handles customer billing.
C)  Insurance on a company showroom where customers can view new products.
D)  Cost of a seminar concerning tax law updates that was attended by the company's controller.E) B) and D)
F) B) and C)

Question 7

The relative proportion of variable, fixed, and mixed costs in a company is known as the company's:

Accepted Answer

A)  contribution margin.
B)  cost structure.
C)  product mix.
D)  relevant range.E) A) and B)
F) None of the above

Question 8

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

Accepted Answer

A)  $18,100
B)  $28,000
C)  $21,400
D)  $14,800E) A) and B)
F) None of the above

Question 9

Contribution format income statements are prepared primarily for external reporting purposes

Accepted Answer

A) True 
 B)False

Question 10

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?

Accepted Answer

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Question 11

Prime cost consists of:

Accepted Answer

A)  direct labor and manufacturing overhead.
B)  direct materials and manufacturing overhead.
C)  direct materials and direct labor.
D)  direct materials, direct labor and manufacturing overhead.E) A) and D)
F) B) and D)

Question 12

Meginnis 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 produced, the total amount of direct manufacturing cost incurred is closest to:

Accepted Answer

A)  $79,200
B)  $63,600
C)  $62,700
D)  $53,700E) All of the above
F) A) and B)

Question 13

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

Accepted Answer

A)  $152,000
B)  $33,000
C)  $45,000
D)  $77,000E) A) and D)
F) A) and C)

Question 14

Fixed costs expressed on a per unit basis:

Accepted Answer

A)  increase with increases in activity.
B)  decrease with increases in activity.
C)  are not affected by activity.
D)  should be ignored in making decisions since they cannot change.E) None of the above
F) B) and C)

Question 15

To the nearest whole cent, what should be the average property tax per unit at a sales volume of 37,300 units? (Assume that this sales volume is within the relevant range.)

Accepted Answer

A)  $19.30
B)  $19.66
C)  $19.72
D)  $19.48E) C) and D)
F) A) and B)

Question 16

Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost, where X is machine-hours.The August budget is based on 8,000 hours of planned machine time.Maintenance cost expected to be incurred during August is:

Accepted Answer

A)  $10,100
B)  $4,800
C)  $500
D)  $5,300E) B) and D)
F) B) and C)

Question 17

Which of the following statements concerning direct and indirect costs is NOT true?

Accepted Answer

A)  Whether a particular cost is classified as direct or indirect does not depend on the cost object.
B)  A direct cost is one that can be easily traced to the particular cost object.
C)  The factory manager's salary would be classified as an indirect cost of producing one unit of product.
D)  A particular cost may be direct or indirect, depending on the cost object.E) None of the above
F) All of the above

Question 18

The cost of shipping parts from a supplier is considered a period cost.

Accepted Answer

A) True 
 B)False

Question 19

The total of the product costs listed above for September is:

Accepted Answer

A)  $292,000
B)  $294,000
C)  $50,000
D)  $586,000E) All of the above
F) None of the above

Question 20

Selling costs are indirect costs.

Accepted Answer

A) True 
 B)False

Exam 1: Managerial Accounting and Cost Concepts

Which of the following is NOT a period cost?

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Selling costs are indirect costs.

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost, where X is machine-hours.The August budget is based on 8,000 hours of planned machine time.Maintenance cost expected to be incurred during August is:

Correct AnswerverifiedShow Answer

Meginnis 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 produced, the total amount of direct manufacturing cost incurred is closest to:

Correct AnswerverifiedShow Answer

Contribution format income statements are prepared primarily for external reporting purposes

Correct AnswerverifiedShow Answer

The cost of shipping parts from a supplier is considered a period cost.

Correct AnswerverifiedShow Answer

If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:

Correct AnswerverifiedShow Answer

In making the decision to buy the model 240 machine rather than the model 310 machine, the differential cost was:

Correct AnswerverifiedShow Answer

To the nearest whole cent, what should be the average property tax per unit at a sales volume of 37,300 units? (Assume that this sales volume is within the relevant range.)

Correct AnswerverifiedShow Answer

The relative proportion of variable, fixed, and mixed costs in a company is known as the company's:

Correct AnswerverifiedShow Answer

The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead.

Correct AnswerverifiedShow Answer

Prime cost consists of:

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Fixed costs expressed on a per unit basis:

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What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

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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?

Correct Answerverifieda. _TB2627...View AnswerShow Answer

Which of the following statements concerning direct and indirect costs is NOT true?

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The total of the product costs listed above for September is:

Correct AnswerverifiedShow Answer

Gabel Inc.is a merchandising company.Last month the company's merchandise purchases totaled $63,000.The company's beginning merchandise inventory was $13,000 and its ending merchandise inventory was $15,000.What was the company's cost of goods sold for the month?

Correct AnswerverifiedShow Answer

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a. _TB2627...
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