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Exam 1: Managerial Accounting and Cost Concepts

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Question 81

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Bee Company's contribution margin for the second quarter is:

A) $463,200
B) $540,000
C) $851,200
D) $431,200

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

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Question 82

Multiple Choice

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In April direct labor was 70% of conversion cost. If the manufacturing overhead for the month was $42,000 and the direct materials cost was $28,000, the direct labor cost was:

A) $98,000
B) $65,333
C) $18,000
D) $12,000

E) B) and D)
F) All of the above

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Question 83

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A cost that differs from one month to another is known as a differential cost.

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

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

A number of costs are listed below. Required: For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it.

Using the high-low method, the estimate of the variable component of office expense per escrow completed is closest to:

In a contribution format income statement, the gross margin minus selling and administrative expenses equals net operating income.

The gross margin for December is:

To the nearest whole cent, what should be the average cost of operating the helpline per call at a volume of 31,300 calls in a month? (Assume that this call volume is within the relevant range.)

Assuming Comco uses the high-low method of analysis, the fixed cost of maintenance would be estimated to be:

If Carne Company were to sell 40,000 units, the total expected cost per unit would be:

Using the high-low method of analysis, the estimated variable electrical cost per machine hour is:

The following data pertains to activity and maintenance cost for two recent periods: Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for maintenance cost is:

When the activity level declines within the relevant range, what should happen with respect to the following?

The gross margin for July is:

The prime cost for December was:

Conversion cost equals product cost less direct labor cost.

Ricwy Corporation uses the cost formula Y = $4,800 + $0.40X for the maintenance cost, where X is machine-hours. The August budget is based on 9,000 hours of planned machine time. Maintenance cost expected to be incurred during August is:

The high-low method uses cost and activity data from just two periods to establish the formula for a mixed cost.