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South Bay Manufacturing began business on January 1. During its first year of
operation, South Bay worked on five industrial jobs and reported the following
information at year-end:
South Bay's allocation of overhead costs left a debit balance of $1,400 in the
Manufacturing Overhead account, which was adjusted to zero at year-end. What was
the amount of gross profit earned during the year?
A) $26,700
B) $2,400
C) $28,100
D) $22,900
Brannon Company manufactures ceiling fans and uses an activity-based costing system.
Each ceiling fan has 20 separate parts. The direct material cost is $70, and each ceiling
fan requires 4.00 hours of machine time to manufacture. Additional information is as
follows:
What is the cost of materials handling per ceiling fan? (Round any intermediate
calculations and your final answer to two decimal places.)
A) $1.60
B) $6.20
C) $2.30
D) $9.20
Newman Automobiles Manufacturing is considering two alternative investment
proposals with the following data:
Calculate the payback period for Proposal X.
A) 5 years
B) 4 years
C) 9 years
D) 8 years
The Perfect Fit Company sells hand sewn shirts at $58.00 per shirt. It incurs monthly
fixed costs of $8,000. The contribution margin ratio is calculated to be 30%. What is the
variable cost per shirt? (Round any intermediate calculations and your final answer to
two decimal places.)
A) $40.60 per shirt
B) $75.40 per shirt
C) $58.00 per shirt
D) $17.40 per shirt
