132) Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost,
where X is machine-hours. The August budget is based on 8,000 hours of planned machine time.
Maintenance cost expected to be incurred during August is:
A) $10,100
B) $4,800
C) $500
D) $5,300
133) At an activity level of 7,200 machine-hours in a month, Falks Corporation’s total variable
production engineering cost is $556,416 and its total fixed production engineering cost is
$226,008. What would be the total production engineering cost per machine-hour, both fixed and
variable, at an activity level of 7,300 machine-hours in a month? Assume that this level of
activity is within the relevant range.
A) $107.93
B) $107.18
C) $108.67
D) $108.24
134) Mullennex 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:
Average
Cost per
Unit
Direct materials
$
6.55
Direct labor
$
3.50
Variable manufacturing overhead
$
1.25
Fixed manufacturing overhead
$
3.00
Fixed selling expense
$
0.50
Fixed administrative expense
$
0.40
Sales commissions
$
1.50
Variable administrative expense
$
0.40
If 5,000 units are produced, the average fixed manufacturing cost per unit produced is closest to:
A) $2.40
B) $2.70
C) $3.00
D) $3.75
Number of units produced (b)
5,000
Average fixed manufacturing cost per unit produced (a) ÷ (b)
$
135) Brault Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.85
Direct labor
$
3.85
Variable manufacturing overhead
$
1.25
Fixed manufacturing overhead
$
97,200
Sales commissions
$
1.00
Variable administrative expense
$
0.55
Fixed selling and administrative expense
$
40,500
If 10,000 units are sold, the variable cost per unit sold is closest to:
A) $22.75
B) $11.95
C) $13.50
D) $28.80
Direct materials
$
6.85
Direct labor
3.85
Variable manufacturing overhead
1.25
Sales commissions
1.00
Variable administrative expense
0.55
Variable cost per unit sold
$
13.50
137) Sparacino Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.90
Direct labor
$
3.90
Variable manufacturing overhead
$
1.70
Fixed manufacturing overhead
$
25,200
Sales commissions
$
1.50
Variable administrative expense
$
0.55
Fixed selling and administrative expense
$
8,100
If 5,000 units are produced, the total amount of manufacturing overhead cost is closest to:
A) $24,750
B) $42,650
C) $33,700
D) $29,225
5,000 units)
Total fixed manufacturing overhead cost
25,200
Total manufacturing overhead cost (a)
$
33,700
67
138) Given the cost formula Y = $23,000 + $8X, total cost at an activity level of 7,000 units
would be:
A) $33,000
B) $79,000
C) $23,000
D) $56,000
139) At an activity level of 8,400 units in a month, Braughton Corporation’s total variable
maintenance and repair cost is $697,284 and its total fixed maintenance and repair cost is
$464,100. What would be the total maintenance and repair cost, both fixed and variable, at an
activity level of 8,500 units in a month? Assume that this level of activity is within the relevant
range.
A) $1,175,210
B) $1,169,685
C) $1,161,384
D) $1,168,297
140) The following data pertains to activity and costs for two months:
June
July
Activity level in units
10,000
11,000
Direct materials
$
17,000
$
?
Fixed factory rent
21,000
?
Manufacturing overhead
20,000
?
Total cost
$
58,000
$
61,300
Assuming that these activity levels are within the relevant range, the manufacturing overhead for
July was:
A) $21,600
B) $20,000
C) $22,000
D) $19,500
141) Paolucci Corporation’s relevant range of activity is 4,000 units to 8,000 units. When it
produces and sells 6,000 units, its average costs per unit are as follows:
Average
Cost per
Unit
Direct materials
$
6.45
Direct labor
$
3.30
Variable manufacturing overhead
$
1.25
Fixed manufacturing overhead
$
3.00
Fixed selling expense
$
1.05
Fixed administrative expense
$
0.60
Sales commissions
$
1.00
Variable administrative expense
$
0.50
If 5,000 units are sold, the variable cost per unit sold is closest to:
A) $17.15
B) $11.00
C) $14.00
D) $12.50
Direct materials
6.45
Direct labor
3.30
Variable manufacturing overhead
1.25
Sales commissions
1.00
Variable administrative expense
0.05
Variable cost per unit sold
142) Schonhardt 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:
Average
Cost per
Unit
Direct materials
$
7.15
Direct labor
$
3.40
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
2.80
Fixed selling expense
$
0.70
Fixed administrative expense
$
0.40
Sales commissions
$
0.50
Variable administrative expense
$
0.40
If 5,000 units are produced, the total amount of fixed manufacturing cost incurred is closest to:
A) $16,800
B) $14,000
C) $12,600
D) $11,200
Fixed manufacturing overhead per unit
Number of units produced*
Total fixed manufacturing overhead cost
143) At a volume of 5,000 units, Pwerson Company incurred $32,000 in factory overhead costs,
including $14,000 in fixed costs. If volume increases to 6,000 units and both 5,000 units and
6,000 units are within the relevant range, then the company would expect to incur total factory
overhead costs of:
A) $35,600
B) $21,600
C) $32,000
D) $18,000
144) Waldhauser Corporation’s relevant range of activity is 3,000 units to 7,000 units. When it
produces and sells 5,000 units, its average costs per unit are as follows:
Average
Cost per
Unit
Direct materials
$
6.10
Direct labor
$
3.45
Variable manufacturing overhead
$
1.75
Fixed manufacturing overhead
$
3.30
Fixed selling expense
$
0.75
Fixed administrative expense
$
0.60
Sales commissions
$
1.50
Variable administrative expense
$
0.45
If 6,000 units are sold, the total variable cost is closest to:
A) $79,500
B) $107,400
C) $67,800
D) $87,600
Direct materials
6.10
Direct labor
3.45
Variable manufacturing overhead
1.75
Sales commissions
1.50
Variable administrative expense
0.45
Variable cost per unit sold
Variable cost per unit sold (a)
$
13.25
Number of units sold (b)
6,000
Total variable costs (a) x (b)
$
145) Comparative income statements for Boggs Sports Equipment Company for the last two
months are presented below:
July
August
Sales in units
11,000
10,000
Sales
$
165,000
$
150,000
Cost of goods sold
72,600
66,000
Gross margin
92,400
84,000
Selling and administrative expenses:
Rent
$
12,000
$
12,000
Sales commissions
$
13,200
$
12,000
Maintenance expenses
$
13,500
$
13,000
Clerical expense
$
16,000
$
15,000
Total selling and administrative expenses
$
54,700
$
52,000
Net operating income
$
37,700
$
32,000
All of the company’s costs are either fixed, variable, or a mixture of the two (i.e., mixed).
Assume that the relevant range includes all of the activity levels mentioned in this problem.
Which of the selling and administrative expenses of the company is variable?
A) Rent
B) Sales Commissions
C) Maintenance Expense
D) Clerical Expense
Sales in units
11,000
10,000
expenses:
Rent
72,600
66,000
Sales commissions
92,400
84,000
Maintenance expenses
Clerical expense
$
12,000
$
12,000
146) Tirri Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.85
Direct labor
$
3.90
Variable manufacturing overhead
$
1.25
Fixed manufacturing overhead
$
22,500
Sales commissions
$
1.00
Variable administrative expense
$
0.55
Fixed selling and administrative expense
$
7,500
If the selling price is $26.20 per unit, the contribution margin per unit sold is closest to:
A) $12.65
B) $6.65
C) $15.45
D) $9.70
Selling price per unit
$
26.20
Direct materials
$
Direct labor
Variable manufacturing overhead
Sales commissions
Variable administrative expense
Variable cost per unit sold
13.55
Contribution margin per unit
$
12.65
147) Macy Corporation’s relevant range of activity is 4,000 units to 8,000 units. When it
produces and sells 6,000 units, its average costs per unit are as follows:
Average Cost
per Unit
Direct materials
$
4.95
Direct labor
$
3.25
Variable manufacturing overhead
$
1.45
Fixed manufacturing overhead
$
4.20
Fixed selling expense
$
1.05
Fixed administrative expense
$
0.60
Sales commissions
$
1.00
Variable administrative expense
$
0.50
If the selling price is $23.50 per unit, the contribution margin per unit sold is closest to:
A) $9.65
B) $6.50
C) $15.30
D) $12.35
Selling price per unit
Direct materials
4.95
Direct labor
3.25
Variable manufacturing overhead
1.45
Sales commissions
1.00
Variable administrative expense
0.50
Variable cost per unit sold
Contribution margin per unit
148) Bellucci Corporation has provided the following information:
Cost per
Unit
Cost per Period
Direct materials
$
7.10
Direct labor
$
3.95
Variable manufacturing overhead
$
1.75
Fixed manufacturing overhead
$
105,300
Sales commissions
$
1.00
Variable administrative expense
$
0.50
Fixed selling and administrative expense
$
36,450
The incremental manufacturing cost that the company will incur if it increases production from
9,000 to 9,001 units is closest to (assume that the increase is within the relevant range):
A) $26.75
B) $12.80
C) $30.05
D) $24.50
Direct materials
7.10
Direct labor
3.95
Variable manufacturing overhead
1.75
Incremental manufacturing overhead
12.80
149) Fiori Corporation’s relevant range of activity is 3,000 units to 7,000 units. When it produces
and sells 5,000 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials
$
6.05
Direct labor
$
3.05
Variable manufacturing overhead
$
1.70
Fixed manufacturing overhead
$
3.00
Fixed selling expense
$
0.50
Fixed administrative expense
$
0.40
Sales commissions
$
1.00
Variable administrative expense
$
0.50
The incremental manufacturing cost that the company will incur if it increases production from
5,000 to 5,001 units is closest to:
A) $16.20
B) $10.80
C) $13.80
D) $14.30
Direct materials
$
Direct labor
Variable manufacturing overhead
Incremental manufacturing overhead
$
150) Haack Inc. is a merchandising company. Last month the company’s cost of goods sold was
$84,000. The company’s beginning merchandise inventory was $20,000 and its ending
merchandise inventory was $18,000. What was the total amount of the company’s merchandise
purchases for the month?
A) $86,000
B) $82,000
C) $84,000
D) $122,000
151) Gabel Inc. is a merchandising company. Last month the company’s merchandise purchases
totaled $63,000. The company’s beginning merchandise inventory was $13,000 and its ending
merchandise inventory was $15,000. What was the company’s cost of goods sold for the month?
A) $91,000
B) $63,000
C) $65,000
D) $61,000
152) The following cost data pertain to the operations of Quinonez Department Stores, Inc., for
the month of September.
Corporate headquarters building lease
$
77,000
Cosmetics Department sales commissions—Northridge Store
$
4,000
Corporate legal office salaries
$
59,000
Store manager’s salary-Northridge Store
$
11,000
Heating-Northridge Store
$
10,000
Cosmetics Department cost of sales—Northridge Store
$
37,000
Central warehouse lease cost
$
16,000
Store security-Northridge Store
$
12,000
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?
A) $78,000
B) $45,000
C) $41,000
D) $37,000