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Chapter 04 Fundamentals of Cost Analysis for Decision Making
Answer Key
True / False Questions
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Multiple Choice Questions
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Gradable: automatic
Learning Objective: 04-01 Use differential analysis to analyze decisions.
Topic: Differential Analysis
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The Minton Company has gathered the following information for a unit of its most popular
product:
Direct materials
$6
Direct labor
3
Overhead (40%
variable)
5
Cost to manufacture
14
Desired markup (50%)
7
Target selling price
21
30.
The following information relates to the Magna Company for the upcoming year.
Amount
Per Unit
Sales
$4,000,000
$10.00
Cost of goods sold
3,200,000
8.00
Gross margin
800,000
2.00
Operating expenses
300,000
.75
Operating profits
$500,000
$1.25
31.
The following information relates to a product produced by Faulkland Company:
Direct materials
$10
Direct labor
7
Variable overhead
6
Fixed overhead
8
Unit cost
$31
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