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Exam 1: Managerial Accounting and Cost Concepts

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Question 61

Multiple Choice

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Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device.Rent on the administrative office space is:

A) a variable cost
B) an opportunity cost
C) a period cost
D) a product cost

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

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Question 62

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

A) True
B) False

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Question 63

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Adens Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: If 5,000 units are sold, the variable cost per unit sold is closest to:

Pedregon Corporation has provided the following information: If 4,000 units are sold, the total variable cost is closest to:

Lagle Corporation has provided the following information: For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is closest to:

Timchak Corporation reports that at an activity level of 9,900 units, its total variable cost is $919,116 and its total fixed cost is $259,974. What would be the total cost, both fixed and variable, at an activity level of 10,100 units? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)

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.

The following costs are all examples of committed fixed costs: depreciation on buildings, salaries of highly trained engineers, real estate taxes, and insurance expenses.

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

Parlavecchio Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: Required:a. For financial reporting purposes, what is the total amount of product costs incurred to make 4,000 units?b. For financial reporting purposes, what is the total amount of period costs incurred to sell 4,000 units?c. If 5,000 units are sold, what is the variable cost per unit sold?d. If 5,000 units are sold, what is the total amount of variable costs related to the units sold?e. If 5,000 units are produced, what is the average fixed manufacturing cost per unit produced?f. If 5,000 units are produced, what is the total amount of fixed manufacturing cost incurred?g. If 5,000 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis?

Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,800 units, its average costs per unit are as follows: Required:a. For financial reporting purposes, what is the total amount of product costs incurred to make 5,800 units?b. For financial reporting purposes, what is the total amount of period costs incurred to sell 5,800 units?c. If 6,800 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.)d. If 6,800 units are sold, what is the total amount of variable costs related to the units sold?e. If 6,800 units are produced, what is the average fixed manufacturing cost per unit produced? (Round "Per unit" answer to 2 decimal places.)f. If 6,800 units are produced, what is the total amount of fixed manufacturing cost incurred?g. If 6,800 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis? (Round "Per unit" answer to 2 decimal places.)h. If the selling price is $23.20 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.)i. If 4,800 units are produced, what is the total amount of direct manufacturing cost incurred?j. If 4,800 units are produced, what is the total amount of indirect manufacturing cost incurred?k. What incremental manufacturing cost will the company incur if it increases production from 5,800 to 5,801 units? (Round "Per unit" answer to 2 decimal places.)

Hinrichs Corporation reports that at an activity level of 2,400 units, its total variable cost is $174,504 and its total fixed cost is $55,080.Required: For the activity level of 2,700 units, compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the average total cost per unit. Assume that this activity level is within the relevant range.

Depreciation on a personal computer used in the marketing department of a manufacturing company would be classified as:

During the month of May, direct labor cost totaled $9,240 and direct labor cost was 30% of prime cost. If total manufacturing costs during May were $80,100, the manufacturing overhead was:

An example of a committed fixed cost would be:

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

Dake Corporation's relevant range of activity is 2,000 units to 6,000 units. When it produces and sells 4,000 units, its average costs per unit are as follows: For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is closest to:

A partial listing of costs incurred at Archut Corporation during September appears below: The total of the product costs listed above for September is:

ErkkilaIncorporated 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 total variable inspection cost at an activity level of 2,400 machine-hours in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)

ErkkilaIncorporated 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.