1-160
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:
1-161
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
High level of activity
Low level of activity
4,000
Change
1,000
Maintenance cost is a mixed cost with both fixed and variable components. Using the
high-low method, the cost formula for maintenance cost is:
1-162
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
Change
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:
1-163
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:
1-165
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:
1-166
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
Change
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?
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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?
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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?
1-171
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?
1-173
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:
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104.
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 prime cost for September was:
1-175
105.
Abare Corporation reported the following data for the month of December:
Direct materials
$63,000
Direct labor cost
$52,000
Manufacturing overhead
$77,000
Selling expense
$26,000
Administrative expense
$36,000
The conversion cost for December was:
1-176
106.
Abare Corporation reported the following data for the month of December:
Direct materials
$63,000
Direct labor cost
$52,000
Manufacturing overhead
$77,000
Selling expense
$26,000
Administrative expense
$36,000
The prime cost for December was:
107.
Krimton Corporation’s manufacturing costs last year consisted of $150,000 of direct
materials, $200,000 of direct labor, $40,000 of variable manufacturing overhead, and
$25,000 of fixed manufacturing overhead.
Prime cost was:
108.
Krimton Corporation’s manufacturing costs last year consisted of $150,000 of direct
materials, $200,000 of direct labor, $40,000 of variable manufacturing overhead, and
$25,000 of fixed manufacturing overhead.
Conversion cost was:
1-178
1-179
109.
A partial listing of costs incurred during December at Rooks Corporation appears below:
Factory
supplies
$7,000
Administrative
wages and
salaries
$92,000
Direct
materials
$176,000
Sales staff
salaries
$32,000
Factory
depreciation
$52,000
Corporate
headquarters
building rent
$47,000
Indirect labor
$23,000
Marketing
$136,000
Direct labor
$82,000
The total of the period costs listed above for December is: