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Exam 1: Managerial Accounting and Cost Concepts

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Question 81

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Which of the following costs would not be included as part of manufacturing overhead?

A) Insurance on sales vehicles.
B) Depreciation of production equipment.
C) Lubricants for production equipment.
D) Direct labor overtime premium.

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Question 82

Multiple Choice

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For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver lamps to customers is best described as a:

A) prime cost.
B) manufacturing overhead cost.
C) period cost.
D) differential (incremental) cost of a lamp.

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Question 83

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All costs incurred in a merchandising firm are considered to be period costs.

The contribution margin for June was:

The following would typically be considered indirect costs of manufacturing a particular Boeing 747 to be delivered to Singapore Airlines: electricity to run production equipment, the factory manager's salary, and the cost of the General Electric jet engines installed on the aircraft.

The total of the period costs listed above for December is:

In October, Patnode Inc., a merchandising company, had sales of $294,000, selling expenses of $27,000, and administrative expenses of $35,000. The cost of merchandise purchased during the month was $211,000. The beginning balance in the merchandise inventory account was $38,000 and the ending balance was $34,000. Required: Prepare a traditional format income statement for October.

Property taxes and insurance premiums paid on a factory building are examples of manufacturing overhead.

Buckeye Company has provided the following data for maintenance cost: The best estimate of the cost formula for maintenance would be:

Using the high-low method, the estimate of the fixed component of office expense per month is closest to:

The best estimate of the total monthly fixed cost is:

The best estimate of the total monthly fixed manufacturing cost is:

Variable cost:

In September direct labor was 40% of conversion cost. If the manufacturing overhead for the month was $66,000 and the direct materials cost was $20,000, the direct labor cost was:

The best estimate of the total variable manufacturing cost per unit is:

A partial listing of costs incurred at Starr Corporation during June appears below: Required: a. What is the total amount of product cost listed above? Show your work. b. What is the total amount of period cost listed above? Show your work.

What would be the total variable cost at an activity level of 3,500 units? Assume that this level of activity is within the relevant range.

The following information summarizes the company's cost structure: Required: Estimate the following costs at the 40,000 unit level of activity: a. Total variable cost. b. Total fixed cost. c. Variable cost per unit. d. Fixed cost per unit.

Carbaugh Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total cost to manufacture 3,300 units is closest to:

The conversion cost for April was: