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214) Lagle Corporation has provided the following information:
Cost per
Unit
Cost per Period
Direct materials
$
4.85
Direct labor
$
3.35
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
8,000
Sales commissions
$
1.50
Variable administrative expense
$
0.45
Fixed selling and administrative expense
$
4,400
For financial reporting purposes, the total amount of product costs incurred to make 4,000 units
is closest to:
A) $46,200
B) $38,200
C) $8,000
D) $50,200
215) Lagle Corporation has provided the following information:
Cost per
Unit
Cost per Period
Direct materials
$
4.85
Direct labor
$
3.35
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
8,000
Sales commissions
$
1.50
Variable administrative expense
$
0.45
Fixed selling and administrative expense
$
4,400
For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is
closest to:
A) $12,200
B) $7,800
C) $4,400
D) $8,100
216) Lagle Corporation has provided the following information:
Cost per
Unit
Cost per
Period
Direct materials
$
4.85
Direct labor
$
3.35
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
8,000
Sales commissions
$
1.50
Variable administrative expense
$
0.45
Fixed selling and administrative expense
$
4,400
If 5,000 units are sold, the variable cost per unit sold is closest to:
A) $14.60
B) $11.50
C) $9.55
D) $11.55
217) Lagle Corporation has provided the following information:
Cost per
Unit
Cost per
Period
Direct materials
$
4.85
Direct labor
$
3.35
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
8,000
Sales commissions
$
1.50
Variable administrative expense
$
0.45
Fixed selling and administrative expense
$
4,400
If 5,000 units are sold, the total variable cost is closest to:
A) $47,750
B) $73,000
C) $57,500
D) $57,750
218) Bowering Corporation has provided the following information:
Cost per
Unit
Cost per
Period
Direct materials
$
6.60
Direct labor
$
3.85
Variable manufacturing overhead
$
1.50
Fixed manufacturing overhead
$
81,000
Sales commissions
$
0.50
Variable administrative expense
$
0.50
Fixed selling and administrative expense
$
44,550
For financial reporting purposes, the total amount of product costs incurred to make 9,000 units
is closest to:
A) $81,000
B) $188,550
C) $107,550
D) $197,550
219) Bowering Corporation has provided the following information:
Cost per
Unit
Cost per
Period
Direct materials
$
6.60
Direct labor
$
3.85
Variable manufacturing overhead
$
1.50
Fixed manufacturing overhead
$
81,000
Sales commissions
$
0.50
Variable administrative expense
$
0.50
Fixed selling and administrative expense
$
44,550
For financial reporting purposes, the total amount of period costs incurred to sell 9,000 units is
closest to:
A) $35,700
B) $9,000
C) $53,550
D) $44,550
220) Mark is an engineer who has designed a telecommunications device. He is convinced that
there is a big potential market for the device. Accordingly, he has decided to quit his present job
and start a company to manufacture and market the device.
The salary that Mark earns at his present employ is:
A) a variable cost
B) a fixed cost
C) a product cost
D) an opportunity cost
221) Mark is an engineer who has designed a telecommunications device. He is convinced that
there is a big potential market for the device. Accordingly, he has decided to quit his present job
and start a company to manufacture and market the device.
Mark purchased a machine two years ago to make experimental boards. The machine will be
used to manufacture the new board. The cost of this machine is:
A) an opportunity cost
B) a sunk cost
C) a differential cost
D) a period cost
222) Mark is an engineer who has designed a telecommunications device. He is convinced that
there is a big potential market for the device. Accordingly, he has decided to quit his present job
and start a company to manufacture and market the device.
The cost of the raw materials that will be used in manufacturing the computer board is:
A) a sunk cost
B) a fixed cost
C) a period cost
D) a variable cost
223) Mark is an engineer who has designed a telecommunications device. He is convinced that
there is a big potential market for the device. Accordingly, he has decided to quit his present job
and start a company to manufacture and market the device.
Rent on the administrative office space is:
A) a variable cost
B) an opportunity cost
C) a period cost
D) a product cost
224) Mark is an engineer who has designed a telecommunications device. He is convinced that
there is a big potential market for the device. Accordingly, he has decided to quit his present job
and start a company to manufacture and market the device.
Property taxes on the building that will be purchased to house the manufacturing facility are:
A) a product cost
B) a variable cost
C) an opportunity cost
D) a period cost
225) At a sales volume of 38,000 units, Tirri Corporation's property taxes (a cost that is fixed
with respect to sales volume) total $733,400.
To the nearest whole dollar, what should be the total property taxes at a sales volume of 37,200
units? (Assume that this sales volume is within the relevant range.)
A) $725,680
B) $733,400
C) $749,172
D) $717,960
226) At a sales volume of 38,000 units, Tirri Corporation's property taxes (a cost that is fixed
with respect to sales volume) total $733,400.
To the nearest whole cent, what should be the average property tax per unit at a sales volume of
37,300 units? (Assume that this sales volume is within the relevant range.)
A) $19.30
B) $19.66
C) $19.72
D) $19.48
227) Leas Corporation staffs a helpline to answer questions from customers. The costs of
operating the helpline are variable with respect to the number of calls in a month. At a volume of
25,000 calls in a month, the costs of operating the helpline total $452,500.
To the nearest whole dollar, what should be the total cost of operating the helpline costs at a
volume of 23,900 calls in a month? (Assume that this call volume is within the relevant range.)
A) $442,545
B) $452,500
C) $473,326
D) $432,590
228) Leas Corporation staffs a helpline to answer questions from customers. The costs of
operating the helpline are variable with respect to the number of calls in a month. At a volume of
25,000 calls in a month, the costs of operating the helpline total $452,500.
To the nearest whole cent, what should be the average cost of operating the helpline per call at a
volume of 25,300 calls in a month? (Assume that this call volume is within the relevant range.)
A) $18.93
B) $18.00
C) $17.89
D) $18.10
229) Dizzy Amusement Park is open from 8:00 am till midnight every day of the year. Dizzy
charges its patrons a daily entrance fee of $30 per person which gives them unlimited access to
all of the park's 35 rides.
Dizzy gives out a free T-shirt to every 100th customer entering the park. The cost of this T-shirt
would best be described as a:
A) fixed cost
B) mixed cost
C) step-variable cost
D) true variable cost
230) Dizzy Amusement Park is open from 8:00 am till midnight every day of the year. Dizzy
charges its patrons a daily entrance fee of $30 per person which gives them unlimited access to
all of the park's 35 rides.
For liability insurance, Dizzy pays a set monthly fee plus a small additional amount for every
patron entering the park. The cost of liability insurance would best be described as a:
A) fixed cost
B) mixed cost
C) step-variable cost
D) true variable cost
231) Dizzy Amusement Park is open from 8:00 am till midnight every day of the year. Dizzy
charges its patrons a daily entrance fee of $30 per person which gives them unlimited access to
all of the park's 35 rides.
Dizzy employees a certified operator for each of its 35 rides. Each operator is paid $20 per hour.
The cost of the certified operators would best be described as a:
A) fixed cost
B) mixed cost
C) step-variable cost
D) true variable cost
232) Dizzy Amusement Park is open from 8:00 am till midnight every day of the year. Dizzy
charges its patrons a daily entrance fee of $30 per person which gives them unlimited access to
all of the park's 35 rides.
Dizzy donates $2 of every entrance fee to a local homeless shelter. This charitable contribution
would best be described as a:
A) fixed cost
B) mixed cost
C) step-variable cost
D) true variable cost
233) At a sales volume of 20,000 units, Choice Corporation's sales commissions (a cost that is
variable with respect to sales volume) total $132,000.
To the nearest whole dollar, what should be the total sales commissions at a sales volume of
18,400 units? (Assume that this sales volume is within the relevant range.)
A) $126,720
B) $132,000
C) $121,440
D) $143,478
234) At a sales volume of 20,000 units, Choice Corporation's sales commissions (a cost that is
variable with respect to sales volume) total $132,000.
To the nearest whole cent, what should be the average sales commission per unit at a sales
volume of 18,500 units? (Assume that this sales volume is within the relevant range.)
A) $6.60
B) $6.87
C) $7.17
D) $7.14
235) Adens 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
$
6.25
Direct labor
$
2.80
Variable manufacturing overhead
$
1.55
Fixed manufacturing overhead
$
2.40
Fixed selling expense
$
0.50
Fixed administrative expense
$
0.40
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) $13.00
B) $10.60
C) $12.10
D) $15.40
236) Adens 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
$
6.25
Direct labor
$
2.80
Variable manufacturing overhead
$
1.55
Fixed manufacturing overhead
$
2.40
Fixed selling expense
$
0.50
Fixed administrative expense
$
0.40
Sales commissions
$
1.00
Variable administrative expense
$
0.50
If 5,000 units are sold, the total variable cost is closest to:
A) $53,000
B) $65,000
C) $60,500
D) $77,000
237) Batterson Corporation leases its corporate headquarters building. This lease cost is fixed
with respect to the company's sales volume. In a recent month in which the sales volume was
28,000 units, the lease cost was $697,200.
To the nearest whole dollar, what should be the total lease cost at a sales volume of 29,200 units
in a month? (Assume that this sales volume is within the relevant range.)
A) $712,140
B) $697,200
C) $727,080
D) $668,548
238) Batterson Corporation leases its corporate headquarters building. This lease cost is fixed
with respect to the company's sales volume. In a recent month in which the sales volume was
28,000 units, the lease cost was $697,200.
To the nearest whole cent, what should be the average lease cost per unit at a sales volume of
26,400 units in a month? (Assume that this sales volume is within the relevant range.)
A) $25.66
B) $24.90
C) $23.88
D) $26.41
239) Oerther Corporation reports that at an activity level of 5,000 units, its total variable cost is
$131,750 and its total fixed cost is $31,200.
What would be the total variable cost at an activity level of 5,200 units? Assume that this level of
activity is within the relevant range.
A) $137,020
B) $131,750
C) $162,950
D) $32,448
240) Oerther Corporation reports that at an activity level of 5,000 units, its total variable cost is
$131,750 and its total fixed cost is $31,200.
What would be the average fixed cost per unit at an activity level of 5,200 units? Assume that
this level of activity is within the relevant range.
A) $6.24
B) $6.00
C) $14.94
D) $32.59
