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Dimitrov Corporation, a company that produces and sells a single product, has provided its contribution format income statement for July.

 

Sales (6,400 units)	$403,200
Variable expenses	275,200
Contribution margin	128,000
Fixed expenses	103,500
Net operating income	$24,500

 

If the company sells 6,300 units, its net operating income should be closest to:

 

	$24,500
	$23,979
	$22,500
	$20,000

 

 

 

A manufacturer of tiling grout has supplied the following data:

Kilograms produced and sold	370,000
Sales revenue	$1,880,000
Variable manufacturing expense	$953,000
Fixed manufacturing expense	$252,000
Variable selling and administrative expense	$330,000
Fixed selling and administrative expense	$218,000
Net operating income	$127,000

 

The company’s contribution margin ratio is closest to:

	49.3%
	82.4%
	31.8%
	75.0%

 

 

Data concerning Runnells Corporation’s single and sells a product. Data co cerning that product appear below:

 

 

	Per Unit	Percent of Sales
Selling price	$140	100%
Variable expenses	70	50%
Contribution margin	$ 70	50%

 

The company is currently selling 5,700 units per month. Fixed expenses are $342,500 per month. The marketing manager believes that a $6,700 increase in the monthly advertising budget would result in a 120 unit increase in monthly sales. What should be the overall effect on the company’s monthly net operating income of this change?

 

	Decrease of $6,700
	Increase of $1,700
	Increase of $8,400
	Decrease of $1,700

 

 

 

Spartan Systems reported total sales of $365,000, at a price of $20 and per unit variable expenses of $14, for the sales of their single product.

 

 

	Total	Per Unit
Sales	$365,000	$20
Variable expenses	219,000	14
Contribution margin	146,000	$6
Fixed expenses	113,000
Net operating income	$33,000

What is the amount of contribution margin if sales volume increases by 20%?

	$146,000
	$39,600
	$175,200
	$26,400

 

 

Lasseter Corporation has provided its contribution format income statement for August. The company produces and sells a single product.

 

 

 

Sales (4,600 units)	$	193,200
Variable expenses		87,400
Contribution margin		105,800
Fixed expenses		45,200
Net operating income	$	60,600

 

 

If the company sells 4,700 units, its total contribution margin should be closest to:

	$61,917
	$105,800
	$108,100
	$110,000

 

 

Darwin Inc. sells a particular textbook for $39. Variable expenses are $28 per book. At the current volume of 49,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:

 

 

	$539,000
	$1,911,000
	$2,450,000
	$1,372,000

 

 

Puchalla Corporation sells a product for $120 per unit. The product’s current sales are 12,300 units and its break-even sales are 10,824 units. The margin of safety as a percentage of sales is closest to:

 

 

	88%
	12%
	14%
	86%

 

 

 

Alpha Corporation reported the following data for its most recent year: sales, $610,000; variable expenses, $305,000; and fixed expenses, $244,000. The company’s degree of operating leverage is:

 

 

	10
	1
	5
	2.0

 

 

A cement manufacturer has supplied the following data:

 

 

Tons of cement produced and sold	245,000
Sales revenue	$1,053,500
Variable manufacturing expense	$427,000
Fixed manufacturing expense	$286,000
Variable selling and administrative expense	$63,000
Fixed selling and administrative expense	$226,000
Net operating income	$51,500

 

What is the company’s unit contribution margin? (Do not round your intermediate calculations.)

rev: 03_14_2012

	$2.00 per unit
	$2.30 per unit
	$0.32 per unit
	$4.30 per unit

 

 

Gilpatric Corporation produces and sells two products. In the most recent month, Product Q71M had sales of $36,500 and variable expenses of $9,540. Product V04P had sales of $57,500 and variable expenses of $37,460. The fixed expenses of the entire company were $37,180.

The break-even point for the entire company is closest to: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

 

 

	$94,000
	$74,360
	$37,180
	$38,630

 

Aaker Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

 

 

Selling price	$135
Units in beginning inventory	0
Units produced	6,750
Units sold	6,450
Units in ending inventory	300
Variable costs per unit:
Direct materials	$21
Direct labor	$51
Variable manufacturing overhead	$15
Variable selling and administrative	$15
Fixed costs:
Fixed manufacturing overhead	$182,250
Fixed selling and administrative	$26,700

 

What is the unit product cost for the month under variable costing?

	$102 per units
	$129 per units
	$114 per units
	$87 per units

 

 

Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

 

 

Selling price	$96
Units in beginning inventory	0
Units produced	8,750
Units sold	8,350
Units in ending inventory	400
Variable costs per unit:
Direct materials	$14
Direct labor	$56
Variable manufacturing overhead	$2
Variable selling and administrative	$6
Fixed costs:
Fixed manufacturing overhead	$131,250
Fixed selling and administrative	$8,400

 

What is the net operating income for the month under variable costing?

	$10,650
	$(18,150)
	$16,650
	$6,000

 

 

Nantua Corporation has two divisions, Southern and Northern. The following information was taken from last year’s income statement segmented by division:

 

 

	Total Company	Southern	Northern
Sales	$5,300,000	$3,280,000	$2,020,000
Contribution margin	$2,300,000	$1,440,000	$860,000
Divisional segment margin	$1,240,000	$960,000	$280,000

 

Net operating income last year for Nantua Corporation was $530,000.

In last year’s income statement segmented by division, what were Nantua’s total common fixed expenses?

 

	$710,000
	$1,060,000
	$1,770,000
	$1,950,000

 

 

Olds Inc., which produces a single product, has provided the following data for its most recent month of operations:

 

 

Number of units produced	6,900
Variable costs per unit:
Direct materials	$51
Direct labor	$45
Variable manufacturing overhead	$4
Variable selling and administrative expense	$7
Fixed costs:
Fixed manufacturing overhead	$227,700
Fixed selling and administrative expense	$531,300

 

There were no beginning or ending inventories. The absorption costing unit product cost was:

 

	$96 per unit
	$133 per unit
	$100 per unit
	$217 per unit

 

 

 

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

 

 

Selling price	$160
Units in beginning inventory	100
Units produced	16,000
Units sold	15,800
Units in ending inventory	300
Variable cost per unit:
Direct materials	$51
Direct labor	$46
Variable manufacturing overhead	$8
Variable selling and administrative	$5
Fixed costs:
Fixed manufacturing overhead	$560,000
Fixed selling and administrative	$173,800

 

What is the total period cost for the month under variable costing?

 

	$560,000
	$252,800
	$733,800
	$812,800

 

 

 

Khanam Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

 

 

Selling price	$125
Units in beginning inventory	0
Units produced	8,750
Units sold	8,850
Units in ending inventory	750
Variable costs per unit:
Direct materials	$27
Direct labor	$44
Variable manufacturing overhead	$8
Variable selling and administrative	$18
Fixed costs:
Fixed manufacturing overhead	$70,000
Fixed selling and administrative	$163,600

 

The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month.

 

What is the net operating income for the month under absorption costing?

	$13,400
	$3,900
	$3,900
	$22,100

 

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

 

 

 

Selling price	$138
Units in beginning inventory	0
Units produced	3,060
Units sold	2,500
Units in ending inventory	560
Variable cost per unit:
Direct materials	$41
Direct labor	$17
Variable manufacturing overhead	$14
Variable selling and administrative	$9
Fixed costs:
Fixed manufacturing overhead	$113,220
Fixed selling and administrative expenses	$32,500

 

The total gross margin for the month under absorption costing is:

 

	$72,500
	$17,500
	$131,700
	$142,500

 

 

 

Khanam Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

 

 

Selling price	$105
Units in beginning inventory	0
Units produced	8,500
Units sold	8,600
Units in ending inventory	500
Variable costs per unit:
Direct materials	$22
Direct labor	$39
Variable manufacturing overhead	$3
Variable selling and administrative	$13
Fixed costs:
Fixed manufacturing overhead	$68,000
Fixed selling and administrative	$162,100

 

The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month.

 

What is the net operating income for the month under variable costing?

	$9,900
	$10,700
	$3,400
	$17,100

 

 

DC Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $142,000 annually and one salaried estimator who is paid $76,000 annually. The corporate office has two office administrative assistants who are paid salaries of $80,000 and $52,000 annually. The president’s salary is $198,000. How much of these salaries are common fixed expenses?

 

 

	$198,000
	$330,000
	$132,000
	$458,000

 

 

 

Khanam Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

 

 

Selling price	$143
Units in beginning inventory	0
Units produced	6,850
Units sold	6,550
Units in ending inventory	300
Variable costs per unit:
Direct materials	$23
Direct labor	$53
Variable manufacturing overhead	$17
Variable selling and administrative	$17
Fixed costs:
Fixed manufacturing overhead	$184,950
Fixed selling and administrative	$27,300

 

The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month.

 

What is the unit product cost for the month under absorption costing?

	$120 per unit
	$93 per unit
	$110 per unit
	$137 per unit

Umanzor Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company’s three activity cost pools as follows: Processing, $52,100; Supervising, $30,100; and Other, $18,600. Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:

 

 

	MHs (Processing)	Batches (supervising)
Product S5	17,400	750
Product F5	900	1,030
Total	18,300	1,780

 

 

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

 

 

	$7.28 per MH
	$2.85 per MH
	$2.53 per MH
	$3.15 per MH

 

 

 

Zumbrunnen Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company’s three activity cost pools-Processing, Supervising, and Other. The costs in those activity cost pools appear below:

 

 

Processing	$10,032
Supervising	$52,752
Other	$26,800

 

Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:

 

	MHs (Processing)	Batches (Supervising)
Product M2	5,100	790
Product H2	15,800	330
Total	20,900	1,120

 

Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.

 

	Product M2	Product H2
Sales (total)	$204,900	$181,100
Direct materials (total)	$102,700	$71,400
Direct labor (total)	$55,500	$76,000

 

What is the overhead cost assigned to Product H2 under activity-based costing?

 

	$41,000
	$7,584
	$15,543
	$23,127

 

 

 

Monson Corporation has two products: G and P. The company uses activity-based costing and has prepared the following analysis showing the total cost and activity for each of its three activity cost pools:

 

 

		Activity
Activity Cost Pool	Total Cost	Product G	Product P	Total
Activity 1	$114,695	330	1,700	2,030
Activity 2	$65,925	730	2,200	2,930
Activity 3	$77,659	530	3,860	4,390

 

The annual production and sales of Product G is 115,840 units. The annual production and sales of Product P is 31,800.

The activity rate under the activity-based costing system for Activity 2 is closest to:

 

	$35.74
	$25.27
	$29.97
	$22.50

The controller of Ferrence Company estimates the amount of materials handling overhead cost that should be allocated to the company’s two products using the data that are given below:

 

 

 

	Wall Mirrors	Specialty Windows
Total expected units produced	7,700	1,450
Total expected material moves	770	1,350
Expected direct labor-hours per unit	14	7

 

The total materials handling cost for the year is expected to be $17,153.10.

If the materials handling cost is allocated on the basis of direct labor-hours, the total materials handling cost allocated to the Wall Mirrors is closest to: (Round your intermediate calculations to 4 decimal places.)

 

 

	$10,513
	$13,841
	$15,674
	$8,864

 

 

 

Capizzi Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

 

 

Overhead costs:
Equipment depreciation	$83,100
Supervisory expense	$2,300

 

Distribution of Resource Consumption Across Activity Cost Pools:
	Activity Cost Pools
	Machining	Order Filling	Other
Equipment depreciation	0.50	0.20	0.30
Supervisory expense	0.50	0.10	0.40

 

Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company’s two products follow:

 

Activity:
	MHs (Machining)	Orders
Product Y7	1,550	770
Product V2	9,010	2,250
Total	10,560	3,020

 

The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:

 

	$2.58 per order
	$5.58 per order
	$3.01 per order
	$55.80 per order

 

 

 

Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 9,000 units and of Product B is 6,500 units. There are three activity cost pools, with total cost and total activity as follows:

 

 

		Total Activity
Activity Cost Pool	Total Cost	Product A	Product B	Total
Activity 1	$36,260	250	490	740
Activity 2	$48,037	880	330	1,210
Activity 3	$120,450	850	3,530	4,380

 

 

The activity-based costing cost per unit of Product A is closest to: (Round your intermediate calculations to 2 decimal places.)

 

 

	$3.94 per units
	$14.33 per units
	$4.54 per units
	$7.84 per units

 

 

 

Brisky Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below:

 

 

Overhead costs:
Equipment depreciation	$117,000
Supervisory expense	$6,200

 

 

Distribution of Resource Consumption Across Activity Cost Pools:
	Activity Cost Pools
	Machining	Order Filling	Other
Equipment depreciation	0.50	0.30	0.20
Supervisory expense	0.50	0.20	0.30

 

 

In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products.

 

 

Activity:
	MHs (Machining)	Orders (Order Filling)
Product I3	6,940	155
Product U8	15,800	986
Total	22,740	1,141

 

 

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

 

 

Sales and Direct Cost Data:
	Product I3	Product U8
Sales (total)	$88,800	$64,100
Direct materials (total)	$34,200	$17,800
Direct labor (total)	$25,400	$27,900

 

 

What is the product margin for Product I3 under activity-based costing? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

 

 

	$6,236
	$5,456
	$10,016
	$3,984

 

 

 

Fogle Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:

 

 

Overhead costs:
Wages and salaries	$162,000
Other expenses	61,000
Total	$223,000

 

 

Distribution of resource consumption:
	Activity Cost Pools
	Making Bouquets	Delivery	Other	Total
Wages and salaries	45%	25%	30%	100%
Other expenses	30%	45%	25%	100%

 

 

The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

 

 

The amount of activity for the year is as follows:

 

 

Activity Cost Pool	Activity
Making bouquets	140,308 bouquets
Delivery	12,700 deliveries

 

 

What would be the total overhead cost per bouquet according to the activity based costing system? In other words, what would be the overall activity rate for the making bouquets activity cost pool? (Round to the nearest whole cent.)

 

 

	$.65 per bouquets
	$.55 per bouquets
	$.70 per bouquets
	$.63 per bouquets

 

 

 

Bevard Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activity-based costing system with three activity cost pools. The activity rate for the Size-Related activity cost pool is $0.85 per guest. (The greater the number of guests, the larger the cake.) The activity rate for the Complexity-Related cost pool is $27.22 per tier. (Cakes with more tiers are more complex.) Finally, the activity rate for the Order-Related activity cost pool is $86.82 per order. (Each wedding involves one order for a cake.) The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately.

 

 

Data concerning two recent orders appear below:

 

 

	Euertz Wedding	Sparacio Wedding
Number of reception guests	72	208
Number of tiers on the cake	5	9
Cost of purchased decorations for cake	$22.55	$80.25

 

 

Assuming that all of the costs listed above are avoidable costs in the event that an order is turned down, what amount would the company have to charge for the Euertz wedding cake to just break even?

 

 

	$306.67
	$22.55
	$86.82
	$358.26

The controller of Ferrence Company estimates the amount of materials handling overhead cost that should be allocated to the company’s two products using the data that are given below:

 

 

 

 

	Wall Mirrors	Specialty Windows
Total expected units produced	15,600	1,100
Total expected material moves	1,560	1,000
Expected direct labor-hours per unit	8	9

 

The total materials handling cost for the year is expected to be $17,181.40.

If the materials handling cost is allocated on the basis of material moves, total materials handling cost allocated to the Specialty Windows is closest to:?   (Round your intermediate calculations to 4 decimal places.)

 

 

	$4,033
	$5,681
	$704
	$6,712