Question 1

The following data pertains to activity and maintenance cost for two recent periods:  Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for maintenance cost is:

Accepted Answer

A)  Y = $8,000 + $1.75 X
B)  Y = $3.75 X
C)  Y = $1,750 + $3.35 X
D)  Y = $3.35 XE) B) and D)
F) C) and D)

Question 2

Conversion cost is the sum of direct labor cost and direct materials cost.

Accepted Answer

A) True 
 B)False

Question 3

Assuming Comco uses the high-low method of analysis, the fixed cost of maintenance would be estimated to be:

Accepted Answer

A)  $14,500
B)  $5,020
C)  $13,000
D)  $12,320E) B) and D)
F) A) and D)

Question 4

Bee Company's contribution margin for the second quarter is:

Accepted Answer

A)  $463,200
B)  $540,000
C)  $851,200
D)  $431,200E) A) and B)
F) B) and D)

Question 5

In April direct labor was 70% of conversion cost. If the manufacturing overhead for the month was $42,000 and the direct materials cost was $28,000, the direct labor cost was:

Accepted Answer

A)  $98,000
B)  $65,333
C)  $18,000
D)  $12,000E) B) and D)
F) A) and B)

Question 6

Ricwy Corporation uses the cost formula Y = $4,800 + $0.40X for the maintenance cost, where X is machine-hours. The August budget is based on 9,000 hours of planned machine time. Maintenance cost expected to be incurred during August is:

Accepted Answer

A)  $4,800
B)  $3,600
C)  $8,400
D)  $1,200E) None of the above
F) C) and D)

Question 7

A number of costs are listed below.  Required:
For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it.

Accepted Answer

1. Cost of a measles vaccine administere...

Question 8

The prime cost for December was:

Accepted Answer

A)  $129,000
B)  $115,000
C)  $109,000
D)  $62,000E) A) and D)
F) B) and C)

Question 9

A cost that differs from one month to another is known as a differential cost.

Accepted Answer

A) True 
 B)False

Question 10

Using the high-low method, the estimate of the variable component of office expense per escrow completed is closest to:

Accepted Answer

A)  $26.75
B)  $118.23
C)  $36.11
D)  $72.49E) A) and C)
F) C) and D)

Question 11

If Carne Company were to sell 40,000 units, the total expected cost per unit would be:

Accepted Answer

A)  $2.50
B)  $2.25
C)  $2.13
D)  $1.88E) B) and D)
F) A) and D)

Question 12

The gross margin for December is:

Accepted Answer

A)  $1,193,100
B)  $929,100
C)  $1,369,400
D)  $2,597,800E) A) and B)
F) All of the above

Question 13

The following costs were incurred in April:  Conversion costs during the month totaled:

Accepted Answer

A)  $39,000
B)  $54,000
C)  $105,000
D)  $51,000E) B) and C)
F) All of the above

Question 14

In a contribution format income statement, the gross margin minus selling and administrative expenses equals net operating income.

Accepted Answer

A) True 
 B)False

Question 15

Conversion cost equals product cost less direct labor cost.

Accepted Answer

A) True 
 B)False

Question 16

The high-low method uses cost and activity data from just two periods to establish the formula for a mixed cost.

Accepted Answer

A) True 
 B)False

Question 17

Using the high-low method of analysis, the estimated variable electrical cost per machine hour is:

Accepted Answer

A)  $0.65
B)  $0.40
C)  $0.70
D)  $0.67E) A) and C)
F) A) and B)

Question 18

The gross margin for July is:

Accepted Answer

A)  $1,618,100
B)  $699,300
C)  $359,900
D)  $534,600E) A) and B)
F) B) and D)

Question 19

When the activity level declines within the relevant range, what should happen with respect to the following?

Accepted Answer

A)  Option A
B)  Option B
C)  Option C
D)  Option DE) C) and D)
F) A) and B)

Question 20

To the nearest whole cent, what should be the average cost of operating the helpline per call at a volume of 31,300 calls in a month? (Assume that this call volume is within the relevant range.)

Accepted Answer

A)  $12.30
B)  $11.79
C)  $10.92
D)  $12.05E) B) and C)
F) A) and D)

Exam 1: Managerial Accounting and Cost Concepts

Using the high-low method of analysis, the estimated variable electrical cost per machine hour is:

Correct AnswerverifiedShow Answer

Using the high-low method, the estimate of the variable component of office expense per escrow completed is closest to:

Correct AnswerverifiedShow Answer

Ricwy Corporation uses the cost formula Y = $4,800 + $0.40X for the maintenance cost, where X is machine-hours. The August budget is based on 9,000 hours of planned machine time. Maintenance cost expected to be incurred during August is:

Correct AnswerverifiedShow Answer

The high-low method uses cost and activity data from just two periods to establish the formula for a mixed cost.

Correct AnswerverifiedShow Answer

In a contribution format income statement, the gross margin minus selling and administrative expenses equals net operating income.

Correct AnswerverifiedShow Answer

Conversion cost is the sum of direct labor cost and direct materials cost.

Correct AnswerverifiedShow Answer

A number of costs are listed below. Required: For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it.

Correct Answerverified1. Cost of a measles vaccine administere...View AnswerShow Answer

The gross margin for July is:

Correct AnswerverifiedShow Answer

In April direct labor was 70% of conversion cost. If the manufacturing overhead for the month was $42,000 and the direct materials cost was $28,000, the direct labor cost was:

Correct AnswerverifiedShow Answer

Assuming Comco uses the high-low method of analysis, the fixed cost of maintenance would be estimated to be:

Correct AnswerverifiedShow Answer

If Carne Company were to sell 40,000 units, the total expected cost per unit would be:

Correct AnswerverifiedShow Answer

The following data pertains to activity and maintenance cost for two recent periods: Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for maintenance cost is:

Correct AnswerverifiedShow Answer

Bee Company's contribution margin for the second quarter is:

Correct AnswerverifiedShow Answer

A cost that differs from one month to another is known as a differential cost.

Correct AnswerverifiedShow Answer

To the nearest whole cent, what should be the average cost of operating the helpline per call at a volume of 31,300 calls in a month? (Assume that this call volume is within the relevant range.)

Correct AnswerverifiedShow Answer

The gross margin for December is:

Correct AnswerverifiedShow Answer

The following costs were incurred in April: Conversion costs during the month totaled:

Correct AnswerverifiedShow Answer

The prime cost for December was:

Correct AnswerverifiedShow Answer

Conversion cost equals product cost less direct labor cost.

Correct AnswerverifiedShow Answer

When the activity level declines within the relevant range, what should happen with respect to the following?

Correct AnswerverifiedShow Answer

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1. Cost of a measles vaccine administere...
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