1-220
145.
Baker Corporation has provided the following production and total cost data for two levels
of monthly production volume. The company produces a single product.
Production volume
6,000 units
7,000 units
Direct materials
$194,400
$226,800
Direct labor
$74,400
$86,800
Manufacturing overhead
$758,400
$779,800
The best estimate of the total monthly fixed manufacturing cost is:
1-221
1-222
146.
Baker Corporation has provided the following production and total cost data for two levels
of monthly production volume. The company produces a single product.
Production volume
6,000 units
7,000 units
Direct materials
$194,400
$226,800
Direct labor
$74,400
$86,800
Manufacturing overhead
$758,400
$779,800
The best estimate of the total variable manufacturing cost per unit is:
1-223
147.
Baker Corporation has provided the following production and total cost data for two levels
of monthly production volume. The company produces a single product.
Production volume
6,000 units
7,000 units
Direct materials
$194,400
$226,800
Direct labor
$74,400
$86,800
Manufacturing overhead
$758,400
$779,800
The best estimate of the total cost to manufacture 6,300 units is closest to:
148.
Callis 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 $141.60 per unit.
Sales volume (units)
5,000
6,000
Cost of sales
$265,500
$318,600
Selling and administrative costs
$393,500
$406,800
The best estimate of the total monthly fixed cost is:
1-225
149.
Callis 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 $141.60 per unit.
Sales volume (units)
5,000
6,000
Cost of sales
$265,500
$318,600
Selling and administrative costs
$393,500
$406,800
The best estimate of the total variable cost per unit is:
1-226
150.
Callis 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 $141.60 per unit.
Sales volume (units)
5,000
6,000
Cost of sales
$265,500
$318,600
Selling and administrative costs
$393,500
$406,800
The best estimate of the total contribution margin when 5,300 units are sold is:
151.
Bee Company is a honey wholesaler. An income statement and other data for the second
quarter of the year are given below:
Bee Company
Income Statement
For the Quarter Ended June 30
Sales
$960,000
Cost of goods sold
420,000
Gross margin
540,000
Selling and administrative expenses:
Selling
$200,000
Administrative
75,000
275,000
Net operating income
$265,000
Other data:
Average selling price
$60 per unit
Selling expenses
Fixed selling expenses plus 8% of sales
Administrative expense
Fixed administrative expenses plus $2 per unit
Bee Company’s net operating income for the second quarter using the contribution
approach is:
1-228
152.
Bee Company is a honey wholesaler. An income statement and other data for the second
quarter of the year are given below:
Bee Company
Income Statement
For the Quarter Ended June 30
Sales
$960,000
Cost of goods sold
420,000
Gross margin
540,000
Selling and administrative expenses:
Selling
$200,000
Administrative
75,000
275,000
Net operating income
$265,000
Other data:
Average selling price
$60 per unit
Selling expenses
Fixed selling expenses plus 8% of sales
Administrative expense
Fixed administrative expenses plus $2 per unit
Bee Company’s contribution margin for the second quarter is:
Sales
$960,000
Variable expenses:
Cost of goods sold
$420,000
Variable selling (8% of $960,000)
Variable administrative ($2 per unit × 16,000 units)
32,000
1-230
1-231
153.
Bee Company is a honey wholesaler. An income statement and other data for the second
quarter of the year are given below:
Bee Company
Income Statement
For the Quarter Ended June 30
Sales
$960,000
Cost of goods sold
420,000
Gross margin
540,000
Selling and administrative expenses:
Selling
$200,000
Administrative
75,000
275,000
Net operating income
$265,000
Other data:
Average selling price
$60 per unit
Selling expenses
Fixed selling expenses plus 8% of sales
Administrative expense
Fixed administrative expenses plus $2 per unit
Bee Company’s cost formula for total selling and administrative expenses, with “X” equal
to the number of units sold would be:
1-232
1-233
154.
Bee Company is a honey wholesaler. An income statement and other data for the second
quarter of the year are given below:
Bee Company
Income Statement
For the Quarter Ended June 30
Sales
$960,000
Cost of goods sold
420,000
Gross margin
540,000
Selling and administrative expenses:
Selling
$200,000
Administrative
75,000
275,000
Net operating income
$265,000
Other data:
Average selling price
$60 per unit
Selling expenses
Fixed selling expenses plus 8% of sales
Administrative expense
Fixed administrative expenses plus $2 per unit
Variable expenses:
If 24,000 units are sold during the third quarter and this activity is within the relevant
range, Bee Company’s expected contribution margin would be:
1-234
1-235
155.
Electrical costs at one of Reifel Corporation’s factories are listed below:
Machine-Hours
Electrical Cost
March
413
$7,371
April
506
$7,740
May
435
$7,447
June
486
$7,660
July
499
$7,704
August
461
$7,563
September
467
$7,571
October
458
$7,522
November
425
$7,403
Change
Management believes that electrical cost is a mixed cost that depends on machine-hours.
Using the high-low method, the estimate of the variable component of electrical cost per
machine-hour is closest to:
1-236
1-237
156.
Electrical costs at one of Reifel Corporation’s factories are listed below:
Machine-Hours
Electrical Cost
March
413
$7,371
April
506
$7,740
May
435
$7,447
June
486
$7,660
July
499
$7,704
August
461
$7,563
September
467
$7,571
October
458
$7,522
November
425
$7,403
Machine-Hours
Electrical Cost
$7,740
Change
Management believes that electrical cost is a mixed cost that depends on machine-hours.
Using the high-low method, the estimate of the fixed component of electrical cost per
month is closest to:
1-238
1-239
157.
Cardillo Inc., an escrow agent, has provided the following data concerning its office
expenses:
Escrows Completed
Office Expenses
January
99
$13,181
February
111
$13,598
March
129
$14,239
April
133
$14,357
May
152
$15,095
June
104
$13,335
July
118
$13,847
August
100
$13,211
September
103
$13,283
Change
Management believes that office expense is a mixed cost that depends on the number of
escrows completed.
Note: Real estate purchases usually involve the services of an escrow agent that holds
funds and prepares documents to complete the transaction.
Using the high-low method, the estimate of the variable component of office expense per
escrow completed is closest to: