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Exam 1: Managerial Accounting and Cost Concepts

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Question 111

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Haack Incorporated is a merchandising company. Last month the company's cost of goods sold was $65,500. The company's beginning merchandise inventory was $19,400 and its ending merchandise inventory was $26,600. What was the total amount of the company's merchandise purchases for the month?

A) $65,500
B) $58,300
C) $72,700
D) $111,500

E) A) and B)
F) None of the above

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Question 112

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Which of the following costs could contain both variable and fixed cost elements with respect to the total output of the company?

A) Sales commissions.
B) Manufacturing overhead.
C) Direct materials.
D) Administrative salaries.

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

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Question 113

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All of the following can be differential costs except:

In account analysis, an account is classified as either variable or fixed based on an analyst's prior knowledge of how the cost in the account behaves.

Skolnick Corporation has provided the following information: Required:a. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred? (Do not round intermediate calculations.)b. If 8,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

The term that refers to costs incurred in the past that are not relevant to a decision is:

Menk Corporation has provided the following information: Required: a. If 5,000 units are sold, what is the variable cost per unit sold?b. If 5,000 units are sold, what is the total amount of variable costs related to the units sold?c. If 5,000 units are produced, what is the total amount of manufacturing overhead cost incurred?

Wages paid to the supervisor of the warehouse where raw materials and parts are temporarily stored before being used in production is considered an example of:

When operations are interrupted or cut back, committed fixed costs are cut in the short term because the costs of restoring them later are likely to be far less than the short-run savings that are realized.

Bressette 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:

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:

Leas Corporation staffs a helpline to answer questions from customers. The costs of operating the helpline are variable with respect to the number of calls in a month. At a volume of 25,000 calls in a month, the costs of operating the helpline total $452,500.To the nearest whole cent, what should be the average cost of operating the helpline per call at a volume of 25,300 calls in a month? (Assume that this call volume is within the relevant range.)

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

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:

In April, Holderness Incorporated, a merchandising company, had sales of $291,000, selling expenses of $21,000, and administrative expenses of $32,000. The cost of merchandise purchased during the month was $169,000. The beginning balance in the merchandise inventory account was $41,000 and the ending balance was $55,000.Required:Prepare a traditional format income statement for April.

Kesterson Corporation has provided the following information: If 6,500 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

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

Dake Corporation's relevant range of activity is 3,800 units to 9,000 units. When it produces and sells 6,400 units, its average costs per unit are as follows: If 5,400 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

Indirect costs, such as manufacturing overhead, are variable costs.

If the activity level increases, then one would expect the fixed cost per unit to increase as well.