88. Gambino Corporation is a wholesaler that sells a single product. Management has
provided the following cost data for two levels of monthly sales volume. The company sells the
product for $138.80 per unit.
Sales volume (units) 6,000 7,000
Cost of sales $369,000 $430,500
Selling and administrative costs $407,400 $418,600
The best estimate of the total monthly fixed cost is:
89. Iaci Corporation is a wholesaler that sells a single product. Management has provided the
following cost data for two levels of monthly sales volume. The company sells the product for
$133.60 per unit.
Sales volume (units) 4,000 5,000
Cost of sales $383,600 $479,500
Selling and administrative costs $124,400 $136,000
The best estimate of the total contribution margin when 4,300 units are sold is:
90. Maintenance costs at a Whetsel Corporation factory are listed below:
Machine-Hours Maintenance Cost
March 3,135 $48,340
April 3,095 $47,993
May 3,133 $48,345
June 3,157 $48,548
July 3,065 $47,733
August 3,076 $47,830
September 3,084 $47,880
October 3,125 $48,247
November 3,098 $48,014
Management believes that maintenance cost is a mixed cost that depends on machine-hours.
Use the high-low method to estimate the variable and fixed components of this cost. Compute
the variable component first and round off to the nearest whole cent. Compute the fixed
component second and round off to the nearest whole dollar. These estimates would be closest
to:
91. The following data pertains to activity and utility cost for two recent periods:
Activity level (units) 8,000 5,000
Utility cost $8,000 $6,150
Utility cost is a mixed cost with both fixed and variable components. Using the high-low method,
the cost formula for utility cost is:
92. The following data pertains to activity and maintenance cost for two recent periods:
Activity level (units) 5,000 4,000
Maintenance cost $16,750 $15,000
Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low
method, the cost formula for maintenance cost is:
93. Electrical costs at one of Kantola Corporation’s factories are listed below:
Machine-Hours Electrical Cost
February 3,570 $36,405
March 3,580 $36,493
April 3,553 $36,302
May 3,627 $36,833
June 3,625 $36,800
July 3,565 $36,366
August 3,548 $36,237
September 3,542 $36,213
October 3,593 $36,577
Management believes that electrical cost is a mixed cost that depends on machine-hours. Use
the high-low method to estimate the variable and fixed components of this cost. Compute the
variable component first, rounding off to the nearest whole cent. Then compute the fixed
component, rounding off to the nearest whole dollar. Those estimates are closest to:
94. Oaklis Company has provided the following data for maintenance cost:
Prior Year Current Year
Machine hours 10,000 12,000
Maintenance cost $24,000 $27,600
Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable
components of maintenance cost are closest to:
95. A soft drink bottler incurred the following factory utility cost: $3,936 for 800 cases bottled
and $3,988 for 900 cases bottled. Factory utility cost is a mixed cost containing both fixed and
variable components. The variable factory utility cost per case bottled is closest to:
96. Supply costs at Chobot Corporation’s chain of gyms are listed below:
Client-Visits Supply Cost
January 12,183 $26,642
February 12,408 $26,853
March 12,232 $26,675
April 12,597 $27,054
May 12,527 $26,988
June 12,608 $27,064
July 12,143 $26,585
August 12,005 $26,454
September 11,944 $26,393
Management believes that supply cost is a mixed cost that depends on client–visits. Use the
high-low method to estimate the variable and fixed components of this cost. Compute the
variable component first, rounding off to the nearest whole cent. Then compute the fixed
component, rounding off to the nearest whole dollar. Those estimates are closest to:
97. Gabat Inc. is a merchandising company. Last month the company’s merchandise
purchases totaled $67,000. The company’s beginning merchandise inventory was $19,000 and its
ending merchandise inventory was $22,000. What was the company’s cost of goods sold for the
month?
98. Haab Inc. is a merchandising company. Last month the company’s cost of goods sold was
$66,000. The company’s beginning merchandise inventory was $17,000 and its ending
merchandise inventory was $11,000. What was the total amount of the company’s merchandise
purchases for the month?
99. The following cost data pertain to the operations of Rademaker Department Stores, Inc.,
for the month of March.
Corporate headquarters building lease $80,000
Cosmetics Department sales commissions-Northridge Store $7,000
Corporate legal office salaries $75,000
Store manager’s salary-Northridge Store $11,000
Heating-Northridge Store $11,000
Cosmetics Department cost of sales-Northridge Store $83,000
Central warehouse lease cost $17,000
Store security-Northridge Store $11,000
Cosmetics Department manager’s salary-Northridge Store $4,000
The Northridge Store is just one of many stores owned and operated by the company. The
Cosmetics Department is one of many departments at the Northridge Store. The central
warehouse serves all of the company’s stores.
What is the total amount of the costs listed above that are direct costs of the Cosmetics
Department?
100. The following cost data pertain to the operations of Rademaker Department Stores, Inc.,
for the month of March.
Corporate headquarters building lease $80,000
Cosmetics Department sales commissions-Northridge Store $7,000
Corporate legal office salaries $75,000
Store manager’s salary-Northridge Store $11,000
Heating-Northridge Store $11,000
Cosmetics Department cost of sales-Northridge Store $83,000
Central warehouse lease cost $17,000
Store security-Northridge Store $11,000
Cosmetics Department manager’s salary-Northridge Store $4,000
The Northridge Store is just one of many stores owned and operated by the company. The
Cosmetics Department is one of many departments at the Northridge Store. The central
warehouse serves all of the company’s stores.
What is the total amount of the costs listed above that are NOT direct costs of the Northridge
Store?
101. The following cost data pertain to the operations of Bouffard Department Stores, Inc., for
the month of May.
Corporate legal office salaries $68,000
Shoe Department cost of sales-Brentwood Store $29,000
Corporate headquarters building lease $86,000
Store manager’s salary-Brentwood Store $12,000
Shoe Department sales commissions-Brentwood Store $5,000
Store utilities-Brentwood Store $10,000
Shoe Department manager’s salary-Brentwood Store $4,000
Central warehouse lease cost $7,000
Janitorial costs-Brentwood Store $10,000
The Brentwood Store is just one of many stores owned and operated by the company. The Shoe
Department is one of many departments at the Brentwood Store. The central warehouse serves
all of the company’s stores.
What is the total amount of the costs listed above that are direct costs of the Shoe Department?
102. The following cost data pertain to the operations of Bouffard Department Stores, Inc., for
the month of May.
Corporate legal office salaries $68,000
Shoe Department cost of sales-Brentwood Store $29,000
Corporate headquarters building lease $86,000
Store manager’s salary-Brentwood Store $12,000
Shoe Department sales commissions-Brentwood Store $5,000
Store utilities-Brentwood Store $10,000
Shoe Department manager’s salary-Brentwood Store $4,000
Central warehouse lease cost $7,000
Janitorial costs-Brentwood Store $10,000
The Brentwood Store is just one of many stores owned and operated by the company. The Shoe
Department is one of many departments at the Brentwood Store. The central warehouse serves
all of the company’s stores.
What is the total amount of the costs listed above that are NOT direct costs of the Brentwood
Store?
103. Management of Lewallen Corporation has asked your help as an intern in preparing some
key reports for September. Direct materials cost was $57,000, direct labor cost was $43,000, and
manufacturing overhead was $71,000. Selling expense was $15,000 and administrative expense
was $32,000.
The conversion cost for September was: